Stanislas de Stabenrath, Director General, Exploration & Mining Suppliers (X&M)

MACIG Connect Series

X&M is continually expanding the range of supplies and products required my mining companies in Côte d’Ivoire to keep pace with a frenzy of exploration.

Do you see any tangible new mining investments taking form in Côte d’Ivoire?

The current Minister of Mines, Mr Brou has developed and implemented incredibly favorable policies and has granted many exploration permits since his appointment. Because of the mineral cycle downturn, exploration investment has been limited in Côte d’Ivoire as junior explorers have very limited access to funding on the stock exchange for greenfield projects. The difficulty in getting funding is deterring new players, but some companies have nevertheless been exploring intensely in Côte d’Ivoire over the last few years. There is however a great deal of opportunity, with Côte d’Ivoire holding a third of the birimian volcano sedimentary belt of the West African craton, for example.

Toro Gold is a new player in Côte d’Ivoire, with their primary site and an advanced project in Senegal, which has been very active over the last two years. The Egyptian company Centamin purchased Ampella in 2014 for its advanced project in Burkina Faso as well as for its permit position in the north of Côte d’Ivoire. Ampella has been very aggressive in exploring both Côte d’Ivoire and Burkina Faso. Otherwise, existing players such as Newcrest, Randgold, Perseus, Taurus Gold and Endeavour, have surely amplified their exploration budgets in the hope of increasing reserves and future production. There are a few advanced projects that should turn into mining operations in the next year or so. Côte d’Ivoire is completely greenfield, so the opportunity to discover new ore bodies is definitely there. Many new companies are seriously looking into acquiring ground position before it is too late, recognizing that Côte d’Ivoire is the next exploration boom destination.

Are there enough service providers and equipment companies in Côte d’Ivoire to keep up with the heightened overall demand?

The network of service providers is not huge, but more will settle here once more mines start opening and more companies begin exploration. Côte d’Ivoire is the next prime mining destination for West Africa, and everyone who is here already knows it. Favorable policies for suppliers and service providers in the mining sector are still expected in order to set Côte d’Ivoire as a West African mining hub: Ghana is definitely more advanced than Côte d’Ivoire in this respect.

What key obstacles still exist that you feel might play a role in preventing investment?

The business environment is quite straightforward because the government is keen for investment. It is easy to get work permits, taxes on profits are favorable, energy is comparatively inexpensive, and so on. Electricity for a mine costs about one third of what it would cost in Burkina Faso, and infrastructure is very developed in comparison to other countries in the region.

There should, however, be more favorable policies for service providers in the mining industry. Services offered by the local banking sector should also be improved, and it should be made possible to hold foreign currency bank accounts. From a legislative standpoint, the new mining code has introduced many new and favorable policies, which is why an increasing number of companies are interested in operating in Côte d’Ivoire.  Nevertheless, certain parts of the mining code will probably need improvement in the near future.

How has X&M been able to capture the market to the extent that it has?

Mining companies are always concerned with cutting operational costs, and, with their needs in mind, we have developed a business strategy that ensures the lowest price for the utmost quality. Availability of stock in West Africa, the knowledge on how to move it quickly and cheaply, and to offer a high client service is the key to success.

We will find a solution for any need and have developed very strong expertise in transport and logistics, which is not an easy task in West Africa. Swift delivery is one of our main focuses. X&M has developed a large and comprehensive portfolio of high quality products and consumables including geological supplies, safety supplies, identification supplies, lab QAQC supplies, vehicle supplies, gas detection supplies and SCBA supplies. We develop distribution in West Africa as well as local and international procurement services. Our business strategy is to become a one stop shop for supplying a very large range of supplies.

In what ways do you work with and support foreign supply companies entering the West African market?

We give foreign supply companies better access to the West African market by signing consignment stock agreements with them. Rather than opening an office and investing a large amount of cash in a difficult environment, suppliers can gain access to our infrastructure and clients. The only risk to foreign suppliers is to hold stock within our facilities. We already hold a large amount of stock on behalf of private and ASX listed companies and have the largest standard stock (CRM) in West Africa in partnership with Ore Research and Exploration (OREAS), an Australian private company known for the quality of their products. We also hold under bonds a large stock of drilling muds, grease and polymers for the drilling sector in partnership with ASX listed companies Imdex Limited and Amc Drilling fluids. We are currently in discussion with other companies to develop similar distribution agreements and are continuously looking for new opportunities.

What are X&M Suppliers’ main priorities looking forward into the next few years?

Working in Africa is surely a risk and a challenge, but X&M is proof that it is possible, as we started here from nothing and have since developed into market leaders in our field in West Africa. The next step for us will be to strengthen our presence in West Africa to become the preferred regional supplier and procurement company in the sub region. We plan to establish ourselves in Burkina Faso, Mali and Senegal in the next few years. With this goal in mind, we will grow the number of employees and service offering, increase the number of products we manufacture, and escalate our stock.

We have just incorporated a procurement agency in Hong Kong to deal with sourcing in Asia, and will continue to integrate services to add value to the supply chain wherever we operate. X&M is also developing manufacturing solutions and its own brand to be distributed in West Africa and worldwide.

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