Finance forum
Hope for Africa
The recent Prospectors and Developers Association of Canada (PDAC) Convention held in Toronto, attracted
more than 25 000 delegates, either offering or seeking opportunities to invest in the most prospective mining
assets and projects around the world, writes Jonathan Veeran and Manus Booysen.
The highlight of this year’s PDAC
Convention was evidence of considerable
potential for investment from Canada
into Africa, if investors can be assured of a
mining-friendly environment.
At a well-attended panel discussion hosted by
Deloitte and Webber Wentzel, participants
discussed key regulatory developments and
opportunities in the mining sector in Africa.
The South African government sent a
delegation headed by deputy director-
general Buyisiwe Faith Ntokozo Ngcwabe,
while other senior delegations from the
African Union were also in attendance.
Resource nationalism in Africa came in
for some criticism. Continuous changes
to mining legislation over the years have
evidently made investors very nervous.
Although investors agreed it was important
that countries legislate to address socio-
economic inequalities, it was felt that the
pendulum had swung too far away from the
needs of mining investors. In their efforts
to milk the cow, African governments
have squeezed it dry. It appeared that
many African governments perceived
only the direct benefits of mining, rather
than the indirect benefits such as growth
in subsidiary industries, skills transfer,
infrastructural development, downstream
and upstream industries, and the general
38 AFRICAN MINING MAY - JUNE 2019
multiplier effect that follows in the wake of
the resources industry.
R
egulatory uncertainty, lack of
policy cohesion, infrastructural
constraints and, in some
instances, politics across the continent,
are clearly seen as deterrents, but there
is great potential to attract investment if
these issues can be addressed.
Disquiet was also evident over South
Africa’s move to cancel bilateral investment
treaties. There were questions to the South
African delegation about the implications
for mining of land expropriation without
compensation, the country’s current power
shortages, and militant labour. Delegates
sought reassurance on contradictory political
messaging and lack of cohesion among
South African government departments.
The level of available investment at PDAC
showed that if perceptions of a hostile
mining environment in Africa and South
Africa could be turned around, there was
considerable potential for funding for
African mining projects from Canada, even
supplanting London as a source of finance.
There appeared to be institutional funding
available for Canadian prospecting companies
and a lot of interest was being expressed
in cannabis (much of which is grown in
Africa). Other areas of interest were minerals
that could feed China’s growth, particularly
its steel industry, including vanadium,
manganese, iron ore, and ferrochrome.
Jonathan Veeran, partner at Webber Wentzel.
Manus Booysen is a partner at Webber Wentzel.
At present, most of Canada’s mining
investment is being directed towards South
American operations and assets, but that
is likely to be temporary. The continent
appeals to Canadian investors, partly owing
to geography but partly also because South
American governments are showing greater
awareness than African governments of
what investors need. which South Africa largely lacks, rather
than the precious and base metals that
the South African government has long
argued are irresistible to investors. The past
decade of declining investment in South
African mining has proven that mineral
endowment is not enough in itself to create
a mining industry.
The convention showed that investors were
currently interested in battery minerals, Jonathan Veeran and Manus Booysen are both
partners at Webber Wentzel. b
www.africanmining.co.za