While Africa’s zinc production represents only 13.6% of global output, there appears to be a revival in zinc projects across the continent, owing to supply and demand forecasts, says International Zinc Association of Southern Africa (Izasa) regional director Rob White.

“It is always difficult to define actual zinc metal stock reserves outside the London Metal Exchange warehouses, but there is a growing feeling that additional zinc projects are required, should capacity constraints occur as predicted,” he says, adding that there are currently about 15 zinc projects under way in Africa, including developing and expansion projects.

Further, White suggests that, owing to increased infrastructure development, access to zinc reserves in Africa is improving, not only for development but also for local refining and supply. “The exact timeframes for these opportunities are difficult to judge, but come they will.”

In addition, White believes the revival of Africa-based zinc projects will assist with the development of infrastructure needed in host countries. Citing a report by multinational professional services firm Deloitte titled ‘Tracking the Trends 2013’, published in 2012, on issues mining companies may face in 2013, he says, “the pace of development is rising as minerals customers become more involved in the transport needs of the countries that supply minerals to them. This is leading a new dynamic in Africa”.

While previous reports have indicated that the consumption of zinc in the sub-Saharan African region is not reflective of the economic growth rates recorded, White asserts that the situation has changed with the continued development of mining and infrastructure, which has resulted in a noticeable improvement in zinc market opportunities in the region.

“We are close to a tipping point where the acceleration of infrastructure development will become self-sustaining and, to me, that is exciting,” says White.

He adds that the low indebtedness of African countries is another driver for sustainable growth and that infrastructure growth, which will continue at a rate of more than 10% a year for the next five to ten years will provide greater opportunities for steel and zinc in Africa than in Brazil, Russia, India and China – otherwise known as the Brics nations, which also include South Africa.

White highlights Africa’s untapped resour- ces, but maintains that infrastructure development will assist with real economic growth and it will promote investor confidence in potential zinc projects’ economic feasibility, which is required for the decade-long commitments needed for these projects.

“It is unrealistic to expect Africa to perpetually remain a backwater. The continent is too large, there is too much arable land. Even as a breadbasket, Africa offers fabulous possibilities,” he stresses.

White believes the most exciting areas of growth for the zinc industry lie north of South Africa. He highlights East Africa’s Great Lakes region and the resource-rich West Africa as regions that offer future yearly growth rates higher than 10%.

“Currently, many multibillion-dollar projects are under way with regard to electricity, transport and water infrastructure development in these regions, and several countries have been able to take full advantage of project opportunities.”

White adds that, although only a third of Africa’s growth is resource-based, there are “boom times”, with many developments proving that the riches are available.

He also notes that, as the African continent holds about 30% of the world’s total mineral reserves, a drive to value-add will not only increase the continent’s gross domestic product but will also offer significant opportunity for zinc to be applied to the corrosion protection of steel used in infrastructure.

Zinc Outlook

Although the zinc market is currently in a precarious position, with the widespread occurrence of global stock drawdowns that will ultimately cause an industrywide shortfall, White asserts that “these shortfalls will drive further exploration, while projects currently in their early phases will move into the feasibility stages and commercialisation”.

Further, he maintains that the current outlook for the Southern African zinc industry has become more positive than in previous years, owing to the consolidation of local zinc supply in the Southern African Development Community (SADC) region to a single regional supp- lier, Namzinc, which should provide support for the industry after the last few years of turmoil, where overseas supply was provided with little or no commitment to local market development.

One of the most devastating blows to South Africa’s zinc industry was the closure of Exxaro Resources’ Zincor refinery, in 2011, which was South Africa’s only zinc refinery at the time. There is still no zinc refinery in South Africa, he adds.

White notes that South Africa remains a significant market player in the zinc industry, even if it is showing little to no growth. He adds, however, that developing projects in East and West Africa will challenge South Africa’s dominance in the zinc industry.

The three main zinc-consuming blocks in sub-Saharan Africa – East Africa, which is centred on Kenya; West Africa, which is centred on Nigeria; and the SADC region, may all compare in size to South Africa’s zinc industry in the next ten years, as infrastructure development continues to benefit those countries in the three blocks wanting to export minerals in general, with links to new ports currently being developed, he concludes.