Despite the progress of African mining operations, they also face significant challenges, global consulting firm Accenture African mining lead Duncan Sloan tells Mining Weekly.

Mining operations in sub- Saharan Africa are being hamstrung by a $93-billion infra- structural backlog; for one, the region requires an additional 7 000 MW of electricity to sustain economic growth, say Sloan.

Further, he says other challenges include transport infrastructure, which is hampering the growth of the industry in sub- Saharan Africa.
Sloan says Botswana and Nambia are examples of African countries that managed their mineral endowments well, while Angola and Mozambique are high-growth countries with great potential.

Sloan stresses, how- ever, that Angola and Mozam-bique suffer from gaps in their skills base, infrastructure and institutional strengths.

“However, all these countries have varying levels of capacity with which to develop their mining industries and maintain their existing infrastructure,” he adds.

Chinese Impact on African Mining

“Certainly Chinese investment in the South African and the broader African mining industry is significant,” asserts Sloan.

Mining Weekly reported in December that mining majors Rio Tinto and Anglo American had sold their 74.5% shareholding in Palabora Mining Company, in Limpopo, South Africa, to a consortium of South African and Chinese entities in a deal that valued the JSE-listed copper and magnetite producer at R5.31-billion.

South Africa’s State-owned Industrial Development Corpor-ation, which has a mandate to support South Africa’s beneficiation aspirations, and Chinese government-owned steel producer Hebei Iron & Steel Group will lead the consortium, which offered R110 a share for the combined 74.5% stake held by the two miners.

Mining Weekly also reported in April that Chinese State-owned China Nonferrous Metal Mining would seek to invest at least R14-billion in South Africa in the next two to three years, highlighting China’s intent to intensify its involvement in the South African mining industry.

New Ventures

Sloan explains that most of the world’s easily accessible mineral deposits have been discovered and exploited for many years, so mining companies are being forced to move operations to new locations in Africa.

He says that these new mining locations are known as ‘frontier countries’ and are generally regarded as riskier ventures because they are often situated in developing countries and/or in areas of political and social instability, such as the Democratic Republic of Congo (DRC) and Guinea.

Sloan notes that gold major AngloGold Ashanti and Africa-focused miner Randgold Resources are building a gold mine in the DRC, across the border from the newly independent South Sudan.

Mining Weekly further reported that South Sudan’s Petroleum and Mining Deputy Minister, Elizabeth James Bol, said at a conference in Australia, in August 2012, that the country’s general geological setting encouraged mining companies to believe there were significant mineral deposits in the country.

Resources currently being extracted in South Sudan include gold, diamonds and marble, as well as talc, clay and silica.