JOHANNESBURG (miningweekly.com) – The rapid growth of Africa’s mining industry, particularly in Central Africa, is being mirrored in the mining explosives and chemicals market, research firm Frost & Sullivan reports.

Through new analysis, the firm has found that almost 65% of major and minor mining firms in the region indicated that they would increase expenditure on explosives and chemicals in the year ahead, thereby stimulating a tepid market environment.

The report, titled ‘Strategic Analysis of the Mining Chemicals and Explosives Markets in sub-Saharan Africa’, found that the $1.11-billion mining explosives market was expected to reach $1.67-billion in 2020.

Mining specialty chemicals volumes were also anticipated to grow from 127 650 t in 2014 to 203 480 t in 2020.

The report suggested that the mining industry was propelled by relative political stability in previously volatile regions, such as the Democratic Republic of the Congo (DRC) and the northern parts of Zambia, as well as the rising demand for minerals from emerging markets. While this benefited the auxiliary markets of mining chemicals and explosives, the depreciating quality of ore and the need to protect the environment also provided a significant boost.

“Beneficiation of mineral resources – separating the usable parts of the ore from the unusable – has become a key focus in Africa,” said Frost & Sullivan chemicals and materials research analyst Lloyd Rubaba, adding that countries such as South Africa and the DRC were proposing instruments to further encourage the processing of minerals locally, giving a leg up to the domestic chemicals and explosives market.

However, mining companies still had to combat several challenges relating to infrastructure, logistics and access to water and electricity supply. In response, market participants were co-locating with mining operations to reduce logistical issues, while mines were implementing on-site water treatment and power generation systems.

Market participants could also consider new business models, such as co-investing with mine operators in water treatment and power assets, while creating more opportunities for other divisions to cross sell. Diversification into solvent extraction and other technologies to extract more from existing or lower-quality ores would also generate opportunities for players.

“African companies are investing in new technologies and global expansion to enhance their competitiveness in the wake of intensifying global competition. Research and development plays a key role in market growth due to the greater complexity of mining operations, variability in ores, and safety and environmental concerns,” Rubaba noted.

Eventually, market participants were expected to turn to acquisitions and partnerships to bolster their prospects and increase their footprints. Thus, companies that offered value through their market access, distribution, or technology stood to gain the most from the trend of inorganic growth.