Effect of economic squeeze on African mining minimal, says Omega Investment’s Dennis Worral

By: Jonathan Faurie

Published: 15th May 2009

The African mining industry has been largely unaffected by the global economic crisis and can serve as a shining light to other continents that have been significantly affected.

This is the view of Dr Dennis Worrall, chairperson of Omega Investment Mining Partners. He says that Africa’s “progression” in the midst of the crisis is largely attributable to the political stability found in most countries on the continent.

“Bar Zimbabwe and the Democratic Republic of Congo (DRC), Africa is politically stable.  “Foreign direct investment into the continent by China and India is boosting the economic landscape in countries that would have had severe levels of economic  recession during the current economic conditions,” says Worrall.

Africa’s current position can also be attributed to the intervention of governments in African economies.  The effect of the global financial crisis on the US is mainly attributable to that country’s precrisis economic model, which discouraged government intervention on the running of the country’s economy. Many African countries have taken a proactive  approach to foreign investment.

Mining Companies In the past, mining companies would come into Africa and mine the commodities that would be exported to another country for beneficiation.

The DRC has already implemented a law that compels companies to beneficiate commodities mined in the vast Central African country prior to export.  Zambia and South Africa are also in  advanced stages of implementing similar  laws.

Although Africa has been largely unaffected by the crisis, Worrall reports that the crisis has limited Africa’s growth to between 6% and 7%.

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