Australian minerals and resource companies have more projects in Africa than in any other region outside Australia, with seven of the top ten fastest-growing Western Australian companies of the last decade having assets in Africa.

This is according to Australian Federal Minister of Resources and Energy Gary Gray, who spoke at the recent Africa Downunder mining conference, in Perth.

He further stated that seven of the ten fastest-growing companies of the past decade in Western Australia had assets in Africa, with the mining sector contributing to about 11% of Australia’s gross domestic product and export revenue from the sale of mineral and energy commodities forecast to be $177-billion from 2012 to 2013.

Australia-Africa Mining Industry Group (AAMIG) CEO Trish O’Reilly believes that strong economic growth in some African countries and reforms that provide transparency and certainty for investors attract a significant amount of Australian investment.

Africa had some of the world’s largest reserves of bauxite, cobalt, industrial diamonds, manganese, phosphate rock, platinum-group metals and zirconium, and many long-standing conflicts had been resolved, resulting in renewed confidence in the continent, Gray said.

“Political and economic reforms have set the stage for encouraging and often strong economic growth, as well as improved governance, political systems and economic management in Africa. The African countries that have achieved the strongest growth in recent years have supported the private sector, strengthened financial markets and improved their regulatory frameworks. They have also implemented reforms in key areas such as commercial law, property rights and investor protection. The results have been stronger growth and increased investment,” he noted.

He added that there had been extraordinary growth, particularly for Western Australian-based companies, as a result of robust commodity prices.

O’Reilly adds that this is also because of early Australian pioneers, Australian resources companies in Africa enjoying and maintaining a reputation for good mining business practice, as well as community engagement and successful project development being at a level which she believes is yet to be surpassed by more recent inflows of miners and project investors from elsewhere.

Gray noted that, in 2012, half of the world’s top ten fastest-growing economies were in Africa and included Sierra Leone, Niger, Côte d’Ivoire, Liberia, Ethiopia, Burkina Faso and Rwanda. According to the World Bank, about a quarter of the nations in Africa had achieved economic growth of 7% or higher in 2012.

Compared with Australia, South African miners are plagued with labour disputes, rising costs and slowing demand, owing to a stagnant global economy, subse- quently leading to a lack of investment in other African mining operations.

However, O’Reilly states that much of the mineral footprint in Africa remains largely under- explored, so there is still plenty of opportunity for those who regard mining as a long-term investment and can balance the potential upside with the risk downside.

“Australian miners focus on establishing a genuine understanding of the modern-era issues confronting the development of Africa’s mineral wealth. These include infrastructure challenges more severe than those faced in Australia, substantial changes in the past 12 months in many African countries to taxation regimes as they aim to strengthen their economic base and some ongoing nervousness about sovereign risk,” she states.