https://www.miningweekly.com

The African mining investment case

8th November 2013

By: David Oliveira

Creamer Media Staff Writer

  

Font size: - +

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.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

Comments

Showroom

Sandvik Rock Processing Solutions
Sandvik Rock Processing Solutions

Sandvik Rock Processing Solutions is a leading supplier of equipment, tools, parts, service and solutions for processing rock and minerals in the...

VISIT SHOWROOM 
AMS Haden Instrument & Mining Services (pty) Ltd
AMS Haden Instrument & Mining Services (pty) Ltd

At AMS Haden, we are a supplier of specialist instrumentation to numerous industries and markets for the specific tasks of monitoring, evaluating...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine cover image
Magazine round up | 26 May 2023
26th May 2023

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?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.052 0.084s - 93pq - 2rq
Subscribe Now