Southern Africa Mining

Southern Africa has long profited from its mineral wealth, until recently. Mature mining destinations were the hardest hit by the collapse in commodity prices. At last the area is seeing some respite.

By Mungo Smith

IMAGE: Courtesy of Vermeer

The downturn in the prices of commodities has slowed down mining activity in Southern Africa over the last three years. Nonetheless, signs of recovery are evident. Immense mineral wealth, from diamonds in Botswana and Zimbabwe, to massive coal deposits in Mozambique and South Africa’s well-known gold reserves, continue to lure investors as commodity prices recover gradually and governments undertake efforts to boost mining activity. Continue reading

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THE OFFICIAL MINING IN AFRICA COUNTRY INVESTMENT GUIDE (MACIG) 2017

Country: Africa Countries • Industry: Mining • Publication: Global Business Reports • Release Date: February 2017 • Authors: Catherine Howe, Laura Brangwin, Imara Salas, Meredith Veit, Pavlina Pavlova, Eduardo Arcos

Executive Summary:

Countries across the continent face common challenges and increasing competition for a diminished pool of global investment and, although some governments are increasing incentives in response, others are tipping the scale too far towards the interests of the country. In an industry already high in risk, factors such as the vast progress in infrastructure and increasing political stability, as well as a more stable legislative framework in many countries, are widely improving investor confidence.

There is a sense of optimism, particularly in younger mining jurisdictions with newly recognized potential. West African countries such as Côte d’Ivoire and Burkina Faso exude particular enthusiasm, with a number of promising exploration activities underway, overshadowing more mature jurisdictions such as Ghana and Mali in terms of interest. Southern Africa’s mining sectors have perhaps been most affected by the downturn, and there are many challenges to be solved going forward. Meanwhile, in East Africa, Kenya’s relatively nascent sector presents itself as the rising star, whilst Tanzania’s much more mature sector is becoming a less favorable investment destination due to its drive to increase return from the mining sector and the seemingly rash decision-making of the new government.

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Mining in South Africa: Cautious Optimism

The commodity cycle and political/regulatory uncertainly have hit South African mining hard. The way forward is technology.

By Eduardo Arcos

IMAGE: Courtesy of Vermeer

The last three years have proved a bumpy ride for the mining industry in South Africa. As Chinese previously insatiable appetite for commodities waned amid a decelerating economy, prices of metals plunged to recession-era lows, major exploration projects were brought to a halt and mine closures took place across the board. Nevertheless, the recent stabilization in the price of commodities has gradually restored confidence from investors, who are once again looking to this region of vast mineral wealth. The overall consensus is that the boom years are gone for good but there are still plenty of opportunities under the new normal, and investors are slowly getting back on board. Continue reading

Is Tanzania Still an Attractive Investment Destination for Mining?

The country’s stability and the widespread recognition of its wealth of resources have long made Tanzania an attractive investment destination, but unfavorable market conditions and uncertainty around the new government regime have taken their toll.

By Catherine Howe

IMAGE: Courtesy of Terra Nova

Home to a relatively mature mining industry, Tanzania is the fourth largest producer of gold in Africa, following South Africa, Ghana and Mali, with proven reserves of minerals including diamond, tanzanite, ruby, garnet and graphite, and metals such as iron ore, nickel and copper. The country’s stability and the widespread recognition of its wealth of resources have long made Tanzania an attractive investment destination, but unfavorable market conditions and uncertainty around the new government regime have taken their toll on the industry. In particular, the drive to increase the country’s financial return from the mining sector, alongside the perception of the new government’s seemingly impulsive decision making, has unsettled many investors. Continue reading

Increasing Development and Return in Kenya’s Gemstone Industry

Whilst Kenya’s gemstone industry is mostly informal, the government is attempting to legalize and industrialize the sector.

By Catherine Howe

IMAGE: Courtesy of Base Titanium

The third largest producer of soda ash worldwide and seventh of fluorspar, Kenya is also home to a large cocktail of minerals and gemstones, including ruby, tsavorite, sapphire, several types of garnet and tourmaline. East Africa is one of the most prominent suppliers of gemstones worldwide but, despite an apparent wealth of precious stones, Kenya remains relatively underexplored and little data on the quantity and quality of resources present is available.

A push by the government to increase development of the extractives sector to account for 30% of GDP from a relatively low 1%, Continue reading

Kenya: The Next Mining Frontier?

Kenya has reformed its institutions and passed a new Mining Act in an effort to dramatically develop its mining potential that is hoped can rise from accounting for 1% of GDP today, to 10% by 2030.

By Catherine Howe

IMAGE: Courtesy of Base Titanium

Whilst mining has historically not been a core area of focus within Kenya’s economy, representing only 1% of GDP, the country’s relatively nascent sector is set for transformation as the government pushes for development and attracting investment. The third largest producer of soda ash worldwide and seventh of fluorspar, Kenya is also home to a large cocktail of minerals but has been relatively underexplored up to this point. Although the government has not previously spent much time optimizing the environment for investment into the sector or sought to quantify Kenya’s mineral offering, change is on the horizon now that the mining industry has been identified as a strategic area of focus going forward. With occurrences of minerals including gold, coal, iron ore, niobium, titanium, limestone, manganese and gemstones, the Kenyan government estimates recent discoveries to be worth US$62.4 billion. Continue reading

High Grades and High Hopes: Burkina Faso’s Golden Promise

Burkina Faso is posited as a top mining investment destination for the coming year.

Meredith Veit

Though international perceptions of the country have wavered, Burkina Faso has consistently remained one of the top five gold producers in Africa since 2012. With a currently calm political environment post-transitional government, over 300 prospective licenses still available, and companies such as Roxgold intersecting 52 grams per tonne (g/t), Burkina Faso is posited as a top mining investment destination for the coming year. Having a less diversified economy, Burkina Faso has dedicated itself to mining over the course of its recent history. Over the past decade, more than nine new mines have come online, and mining entities were largely unaffected by the uncharacteristic violence that occurred in 2014. “The higher gold price in 2016 means renewed investor confidence, and exploration and project development has really picked up,” stated Mark Benning, divisional director of AEL Northwest Africa.

Burkina Faso is landlocked, surrounded by Mali to the north, Niger to the east, Benin to the southeast, Continue reading