https://www.miningweekly.com

Consumer FDI eclipsing mining investment in Africa

9th February 2015

By: Martin Creamer

Creamer Media Editor

  

Font size: - +

CAPE TOWN (miningweekly.com) – The rising prominence of investment in consumer-linked industries in Africa is significantly eclipsing investment in mining, with mining’s share hitting an all-time low at only 2% of foreign direct investment (FDI) in recent years.

Technology, media and telecommunications have risen to 20% of the FDI into Africa, retail and consumer products to 17% and financial services 15%.

Hauntingly, renowned economist Damisa Moyo speaks forebodingly of the world moving on to a highly volatile, low-growth platform for a prolonged period.

With the consensus forecast for iron-ore rising to only $85/t by 2020, iron-ore projects in Africa have taken a knock.

However, Core Metals MD Lara Smith, who addressed this month's Investing in African Mining Indaba run with MD Jonathan Moore at the helm, tells how Africa has the potential to make a far bigger contribution in rare earths and minor metals, including tantalum and minor platinum group metals (PGMs), while SFA Oxford chairperson Stephen Forrest outlines how real opportunities exist for growth in PGMs mining in Southern Africa, where he describes the earth as “bursting” with a plethora of the precious metals.

Gold at $1 250/oz has resulted in 12% of production being below its all-in sustaining cost and some consensus averages only see the gold price rising to $1 350/oz by 2020.

the same consensus average compilers put copper at $6 500/t in the next five years, platinum at above $1 700/oz and palladium at $850/oz.

Smith highlights the demand potential for minor metals, including PGMs and rare earths, in the huge global uptake of  smartphones, laptops, tablets and desktops as well as television flat screens.

This is also so in energy and the environment in wind, solar and nuclear power.

Wind power is expected to grow by 6% compound annual growth rate by 2018, with a long list of minor metals coming into play as a result.

Because of constraints applied on rare earths by China, there was a trend towards national self-sufficiency in minor metals, which were also needed increasingly in defence equipment. 

With increased instability among nations, more was expected to be expended on defence, as well as self-sufficiency through natural gas, which also created minor metals demand.

Combined military expenditure of Japan, China and the US was expected to increase by 4% compound yearly growth rate going forward.

China’s success in rare earths, Smith says, can be related to factors including the low cost of production and government support in the form of subsidies of downstream products.

Edited by Creamer Media Reporter

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

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