Mineral and agricultural production in Africa should be increased to cope with the rising demand from the continent’s increasing population, which is expected to top the 1.4-billion mark by 2025, says strategy and operation company AT Kearney.
Further, the company says, Africa, with its fast-growing economies, needs to focus its attention on the increasing number of licences being granted for new mineral exploration and production, especially in the hinterland, which means that there will be a need to develop infrasructure for the transport of mineral commodities to the coast for export to international markets. With the increase in mining licences and the discovery of new mineral resources, there will be a need to develop infra- structure.
“In Southern Africa, mining licences are being granted in the hinterland for new mineral exploration and production, and this means that supply chains have to follow them.”
To illustrate this point, the company’s principal, Martin Sprott, says that, until recently, no major mineral discovery in Zambia had been made more than ten miles from a main road. However, with commodity prices high and mining companies aiming to uncover new resources, finds are moving away from the roads into the hinterland.
Sprott says supply chain costs in remote locations are high and that they differ significantly between markets, resulting in significantly varying product pricing and costs.
“The reason why costs are high lies in the fact that supply chains are long, owing to their location within the hinterland.
Newly granted exploration licences are in areas where there is no infrastructure and the infrastructure that will be built will have to go over mountains and rivers.”