EXTRACTIVES UNDERGO
A CONTINENTAL SHIFT
Africa is seeing a rapid expansion in mining and project development,
writes Duncan Bonnett.
S
outhern and East Africa is mining country and Central
and West Africa is oil country, right? Maybe in the
past, but a combination of new technology, revisiting
archives, expanded infrastructure and global demand
is seeing a rapid expansion of mining activity in Central and
West Africa, with the eastern seaboard and hinterland of
Africa now a global hotspot for oil and gas development.
It was recently announced with much joy and fanfare or shock
and despair (depending on which country you live in) that Ghana
has overtaken South Africa as Africa’s premier gold producer.
South Africa’s ageing mines, depth and soaring costs were cited
as key reasons for this, and whilst true, they don’t tell the full
story – changes in much of the rest of Africa are seeing a rapid
expansion in mining prospecting and project development.
About 15 years ago, Mali was the flavour of the month,
followed by Ghana as the two countries embarked
on regulatory reforms that encouraged more
companies to prospect for minerals there.
They’ve been followed by Côte
d'Ivoire, Burkina Faso, Guinea,
Liberia, Sierra Leone and others to
a lesser extent, as a combination
of gradually maturing legal and
regulatory systems, political
stability (not guaranteed in
some cases) and the ability
to get feet on the ground has
improved in the last decade.
With a sense that mineral prices
are recovering in some quarters,
it provides fertile ground for this
exploration in ‘new’ jurisdictions.
Meanwhile, on the other side of Africa, an explosion of new oil
and gas projects is set to transform the region completely. Whilst
not strictly mining projects, many of the goods and services
used are common to both industries and so represent a good
African Mining October 2019
Currently, Mozambique, Tanzania, Kenya, Uganda, Ethiopia and
Rwanda are all at various stages of unlocking this oil or gas
potential and the associated infrastructure and downstream
potential they hold. In addition, Zambia, Malawi, Djibouti, Eritrea,
Somalia and the semi-autonomous region of Somaliland are all
gearing up for exploration and development of perceived large
deposits and South Sudan is looking to ramp production
back up to around 350 000 barrels a day from
current levels of less than half that. The value of
these developments could be in the region of
USD125-billion to USD130-billion over the
next decade.
"On the other side
of Africa, an explosion
of new oil and gas projects
is set to transform the
region completely.
In addition, there is a good spread of
minerals being explored for, from gold
and diamonds, to the new energy minerals like
lithium, graphite, cobalt and others, as well as base
metals and minerals such as iron ore, bauxite, copper, potash
and others. Excluding South Africa’s very well-developed sector,
Central and West Africa now account for around 40% of current
exploration and development projects in sub-Saharan Africa – a
figure that is well above the levels of a decade ago.
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opportunity for suppliers familiar with either. From Mozambique
in the south to the Horn of Africa, what is being described as
the world’s last great unexplored oil and gas region is finally
getting the attention it deserves. Again, regulatory changes
and technology (with lower associated development costs) are
driving much of this, even if it isn’t always easy going. Demand
for both oil and gas in Asia is fuelling much of this development,
with greener energy now much prized in China, Japan and India
as they move away from coal.
Finally, to complete the counter-
intuitive picture of Africa’s supposed
extractives map, Botswana is seeing
much interest in non-traditional
minerals such as copper, manganese
and other base metals. South Africa
is seeing the development of mines
in new areas and the expansion or
rehabilitation of existing ones, despite
the current climate of gloom in the
sector. Namibia and Angola are also
looking more prospective, whilst the DRC,
straddling southern central and eastern Africa
as it does, has a raft of developments underway
and in the pipeline.
There remain headwinds, however, with regulatory or political
uncertainty still a major factor in some countries, including
long-standing mining countries such as Zambia, Tanzania, South
Africa and some in Central Africa. In addition, there is still a large
infrastructure backlog to remote mining areas that is impeding
development of resources in uncertain price climates. As such,
it’s not a done deal that the surge in activity will sustain itself in
every country or region, but there is certainly enough activity for
companies to sit up and look anew at their targets for expansion
into the region.
www. africanmining.co.za