Temporary power and temperature-control solutions provider Aggreko has found, in an opinion survey, that more than half of the respondents are optimistic about the future of the African mining industry.

The survey was conducted at this year’s Investing in African Mining Indaba, which took place from February 4 to 7 in Cape Town.

Aggreko CEO Rupert Soames tells Mining Weekly that, of the 277 respondents, 58% are cautiously optimistic about mining in Africa for 2013. The respondents add, however, that much depends on the global economic recovery and whether demand from markets in China and India remains strong.

“The responses were drawn from several mining professionals and business leaders at the Indaba. The event brings together key players in the industry and having the opportunity to capture the insights and views of such an influential group is a powerful way for us to assess the mood of the industry for the coming year,” says Soames.

The ‘hottest’ commodity to invest in over the next 12 months, according to 41% of the respondents, is gold, followed by coal (19%) and copper (16%).

Forty-five per cent of respondents indi- cate that political instability and labour unrest will be the biggest impediments to growth in African mining this year.

Meanwhile, West Africa has been identified by 35% of the respondents as having the best opportunities for mining in 2013, followed by Central Africa, with 27%, and Southern Africa, with 23% of the votes.

Forty-three per cent of respondents confirm that they attend the Indaba for the networking opportunities, while 20% say they attend for new business- development opportunities.

Further, 43% of respondents say expertise is the most important feature when selecting a mining service supplier, 23% favour value for money and 17% a good reputation.

Soames notes that the Indaba was extremely busy and that the quality of the presentations was a highlight for him.

“I also got the feeling that the whole mining industry is taking the community-development side of mining much more seriously, realising that it is an integral part of what we do. This is a step forward,” he says.

Industry Developments

Soames notes that the industry is continuously developing and moving forward and mining service providers have to stay abreast of these developments.

“Mines are getting deeper and resources are becoming more difficult to find, but technology is also improving quickly. We saw some astonishing technologies at the Indaba,” he says.

In terms of Aggreko’s business, Soames notes the industry is moving towards using portable power, a trend which he says is growing rapidly in Africa.

“Historically, mines either built their own power stations or they were connected to the electricity grid. Mines need a solid connection to a reliable and affordable power source, which is becoming an increasingly rare commodity, given the power shortages in Africa and the rural areas where mines are being built.

“Aggreko is able to offer these mines a 24/7 reliable power source, which is like being connected to a grid,” he says.

Soames adds that, with mines being more cautious with their money, there is also a trend in the industry towards starting production at the mine while it is still a small operation and working up to full-scale mining.

“This means we have a lot of clients who want to use our temporary power supply for a few years until they are operating at full production, at which time they will build their own power plant,” he explains.

Another trend Soames identifies is companies’ approaches towards mining commodities such as nickel, gold and copper.

“The mining companies that can afford it choose to mine the commodity only when the price of the commodity is above a certain level. Should the price level drop, the company shuts down the mine until the price level improves.

We have customers who use our temporary power for this, as it is not worth their while to build a power plant that will not be used all the time. This ability to move power generators in and out at a customer’s request is something that is becoming increasingly important in the modern mining industry,” he says.

Going Forward

Looking ahead, Soames has a positive outlook on all fronts for mining in Africa.

“The future, in my opinion, is bright. I think it is going to be much more diverse and evenly balanced, with more countries mining significant commodities. I think mining will also be less concentrated in South Africa. This is not to say there will be less mining in South Africa, but there will be more mining everywhere else on the continent,” he says.

Soames notes, however, that mining in Africa does come with challenges, such as political instability and remote locations.

“I am an African optimist, but it is true that the political situation in an African country can quickly become unstable. However, I feel the whole trajectory for Africa going forward is positive. The consumer economy is growing.

“My favourite statistic from the survey is that there are currently more mobile phones in sub-Saharan Africa than there are in the European Union,” he concludes.