The African mining investment case
The current downturn in commodity prices has resulted in decreased project activity globally. This current cycle means that companies are looking for greater security from any poten- tial investment into mines, notes professional services firm KPMG.
This creates a precarious situation for the African mining sector, owing to the lack of infrastructure in most parts of the continent, a shortage in skilled labour and labour unrest and violent conflicts. All these issues have resulted in decreased investor confidence in the African mining sector.
The challenges of getting raw materials to port for export, particularly in iron-ore-rich West Africa, often require mining companies to take on infrastructure projects themselves. This impacts severely on the profitability of mining operations and, therefore, investor’s will- ingness to invest in mining projects.
Further, labour unrest and violent conflicts on the con- tinent, such as the attacks by M23 rebels in the Democratic Republic of Congo, compound the challenge for African countries to secure mining investment. Rebels, who often earn income from illegally ‘taxing’ informal artisanal miners, dispute the authority of central government to bestow mining licences to the international mining industry.
If this factor does not inhibit the investment going ahead, the lack of skilled labour is another hurdle to straddle, as investors are unsure that projects can be executed on time and efficiently.
Meanwhile, labour unrest, particularly in South Africa, has severely impacted on that country’s investment business case.
However, the continent remains the most promising mining destination for future projects, owing to the continent’s abundance of commodities, such as gold, coal and ferrous metals. As such, investors will be more attracted to initiating new projects in Africa when commodity prices rise.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation