The minerals exploration boom in Africa is expected to contribute significantly to the ambitious Programme for Infra- structure Development in Africa led by the African Union Commission (AUC), the New Partnership for Africa’s Development (Nepad) and the African Development Bank (AfDB), says Nepad.
Low confidence in investment by foreign entities wanting to conduct business in Africa can be strongly attributed to the lack of sufficient infrastructure, states a research report, ‘Mining as catalyst for development in under-developed regions: an African perspective’, by Roelf Sandenbergh, Con Fauconnier and Roger Baxter from the South African Academy of Engineering. The mining sector is seen as an instrumental catalyst in Africa for the development of an adequate logistics, communication and power works infrastructure needed to attract more business.
Foreign investment in the continent’s minerals is high. “Africa is rich in resources, and we see an increasing number of mining companies doing business in Africa because of the access to minerals and the opportunity to find new resources,” explains JSE senior manager for marketing and business development Noah Greenhill.
Further, the establishment of mines in Africa will result in sustainable development, as the infrastructure built for the operational purposes of the mines will be used by employees and their families, as well as residents affected by the project, during and after the mining process.
“When companies, which are at times assisted by the State, commit, it translates into the construction of infrastructure and the payment of taxes, which uplifts the economy,” says Greenhill.
He highlighted the importance for foreign investors to have a proactive end in mind. “Without a sustainable long-term view, the outcome is one sided when it needs to be a win-win situation,” he suggests.
Meanwhile, in South Africa, Northern Cape manganese mine Tshipi has become the ideal example of the important role that infrastructure plays in the operations of a project. The mine will initially rely on a reallocation of rail capacity or entitlement from existing producers to new entrants. This effectively just cuts the pie into smaller less productive units rather than creating additional benefits for the country that a major expansion would bring. The State is currently treating the matter as urgent and evaluating a significant increase in the railroad to Coega with port facilities to match.
In Botswana, diamond miner De Beers will be moving its diamond sorting headquarters from London to Gaborone. With some of the world’s biggest and richest reserves, Botswana may see growth in its economy as a result, with growing numbers of buyers and dealers of diamonds expected. The development of other sectors, such as hospitality, with an influx of tourists, is also likely.
Infrastructure development continues to take shape through mining in Africa, with Indian steel manufacturer and power generation company Jindal Steel & Power set to build a 2 640 MW power plant in Tete, in Mozambique.
This coal-bearing province, which is one of the largest undeveloped coal mining regions in the world, hosts various mining operations, such as the Ncondezi coal project.
The $376-million project has a total Joint Ore Reserves Committee (Jorc)-compliant resource of 1.8-billion tons.
Ncondezi’s first coal production is scheduled for the end of 2014 or early 2015, while it has an estimated 37-year life-of-mine.
Further, the Moatize mine, also in Tete, was officially inaugurated in May.
Over the next 35 years, the first phase of the project should produce 11-million tons of coal, of which 8.5-million tons will be metallurgical coal and 2.5-million tons thermal coal.
Meanwhile, in view of the world energy crisis, the development of nuclear power stations becomes an option and uranium a sought- after commodity.
In Namibia, the $638-million Etango uranium project is being developed in Erongo.
The current plan is to develop a large openpit uranium operation with an average production rate of between five-million and seven-million pounds of uranium oxide a year over 20 years.
Demand for gold is also expected to increase, with global financial services firm UBS Sub-Saharan Africa market head Marco Spichiger forecasting the upside potential of some gold stocks to be realised in the next 12 to 18 months.
This could potentially drive further gold projects in Africa, such as the Konongo gold project, in Ghana.
The gold project will be developed into a 100 000 oz/y gold producer from the existing Jorc-compliant resource of over 1.27-million ounces.
An internal scoping study has indicated that the mine’s gold output could be increased to between 40 000 oz/y and 60 000 oz/y by increasing plant throughput to 700 000 t/y.