Africa Research Online posted: " The annual mining investment conference taking place from May 9th to 12th in Cape Town saw record registration as African heads of state courted investment into the pandemic-hit mining sector. The first Investing in African Mining Indaba confe"
The annual mining investment conference taking place from May 9th to 12th in Cape Town saw record registration as African heads of state courted investment into the pandemic-hit mining sector. The first Investing in African Mining Indaba conference to take place in person in two years was an opportunity for African countries to lure investment into the sector that has remained resilient during Covid-19 amid strong demand for mining commodities.
Headlining the event were heads of state from Zambia, Botswana, Zimbabwe and South Africa pitching opportunities in the continent's rich precious metals and minerals seams.
Zambian President Hakainde Hichilema, in a keynote speech on Day 1 of the conference, dubbed "A New Dawn for Zambia's Mining Sector" highlighted the country's huge mining potential. He welcomed two landmark investments by First Quantum Minerals, signed off by its board on May 8th, involving US$1.25 billion to expand production and extend the life of Zambia's Kansanshi Mine and an additional US$100 million investment to bring online the US$250 million new Enterprise Nickel Mine, the largest investment commitment seen in Zambia in the last decade.
President Cyril Ramaphosa, speaking on Day 2 of the gathering, unveiled plans to transform South Africa's massive platinum belt into "hydrogen valley", as he positions the country as a hub in a market expected to be worth $2.5 trillion by 2050. Ramaphosa also discussed the country's transition from coal, which supplies about 80% of its grid energy, to cleaner energy, a theme that ran deep throughout the conference. He said that mining remained a critical pillar of the South economy. "Mining is a significant contributor to export earnings, it is an important source of foreign direct investment, and directly employs nearly half a million people and we expect mining's significance and contribution to our economy to grow."
President Mokgweetsi Masisi showcased Botswana's rich manganese deposits, demonstrating that the country has more to offer than just diamonds. Noting that there remains a significant quantity of resources in Botswana still undiscovered, he described how his government is mounting a significant investment into pre-composition data in order to showcase the potential of the country and encourage investment. Minerals remain central to the country and while it is dominated by diamonds, it also has reserves of coal, gold, nickel, uranium, magnesium, iron ore and more.
Zimbabwe's President Emmerson Mnangagwa highlighted the nation's lithium mining opportunities, which could attract investors keen to wean themselves off Ukrainian lithium. The critical minerals used in electric vehicle batteries have seen burgeoning demand as consumers in the electric vehicle battery supply chain seek longer-term contracts with producers in Africa.
The pandemic and its effect on mining was another important theme during the three-day conference, with African nations seeking to capitalise on higher metals prices and the transition to green energy. The crisis in Ukraine and its impact on African commodities and metals was also on the agenda, as well as topics such as artisanal mining, women in mining, mining codes in different African regions and investing in communities and their mines. The conference drew around 5,000 attendees, including the four heads of state, 40 ambassadors and ministers, and numerous CEOs of mining companies.
According to the United Nations, Africa is home to about 30% of the world's mineral reserves, including 40% of the world's gold and up to 90% of its chromium and platinum. In 2019, the continent produced almost 1 billion tonnes of minerals worth $406bn.
About 63% of the world's cobalt production comes from the Democratic Republic of the Congo. DR Congo and Rwanda are the world's largest producers of tantalum, together producing half of the world's stock of the precious metal.
Metals including gold, iron, titanium, zinc and copper are the top produced minerals for 11 countries. Ghana is the continent's largest producer of gold, followed by South Africa and Mali.
Industrial minerals such as diamonds, gypsum, salt, sulphur and phosphates are the main commodity for 13 African countries. DR Congo is Africa's largest industrial diamond producer, followed by Botswana and South Africa. Botswana ranks number one in Africa for the production of gem-quality diamonds used for jewellery.
However the risks of mining in sub-Saharan Africa remain high. The security challenge facing mines in the gold-rich Sahel region was highlighted in April when Russia's Nordgold abandoned its Taparko gold mine in Burkina Faso over an increasing threat from militants.
The mine, which produced 53,500oz of gold in the first nine months of 2021, had witnessed several attacks by militants. Nordgold subsidiary Société des Mines de Taparko (SOMITA) director-general Alexander Hagan Mensa was cited by Reuters as saying that the gold producer was facing threats against its operations and employees every day. According to the statement, access to the mine had become "quasi-impossible", placing the lives of staff in danger at the site, which is located close to the tri-border area of Niger, Burkina Faso and Mali. "The company finds itself in a situation of total incapacity to continue its activities," Mensa said.
On May 8thAFP reported that raiders had killed at least 35 people in an attack on an artisanal gold mine in Ituri, in the strife-torn northeast of DR Congo. One local official, Jean-Pierre Bikilisende, of the rural Mungwalu settlement in Djugu, Ituri, said the CODECO militia had carried out the attack.
Artisanal mining presents a giant headache for mining companies. The deaths of 43 illegal miners at a Glencore copper mine in DR Congo in June 2019 highlighted the challenge. Many mines span hundreds of square kilometers across rural terrains, a tantalising prospect for illegal miners, who break into sites in search of metals, some of which end up in electric cars, mobile phones and other products. The site is operated by Kamoto Copper Company (KCC), a joint venture between Glencore-controlled Katanga Mining Ltd and the state-owned Gecamines. About 2,000 illegal miners regularly access the site, Glencore said.
Only part of the perimeter, which abuts densely-populated residential areas, is protected by fencing, giving the local population easy access. Young men can often be seen just outside the mine carrying shovels and sacks brimming with freshly-mined ore to nearby trading depots dominated by Chinese buyers. Private contractors provide most of the security, but activists say they are often ineffective and easily bought off by the miners in exchange for ignoring trespassers.
In South Africa, there are an estimated 30,000 illegal miners providing one of the biggest sources of illicit gold on the continent, with an output of around 14 billion rand ($994.4 million) per year, according to ENACT, which conducts research into transnational organized crime. The illegal miners are known in Zulu as "zama-zamas," which loosely translates as "those who try to get something from nothing." Sibanye-Stillwater, which spent millions upgrading its security infrastructure, found almost 1,400 zama-zamas in its Cooke gold mine during a 2017 security sweep.
With Russia's 7% of global nickel supply, 10% of the world's platinum, and 25-30% of the world's palladium off the table, Africa's rich deposits of those metals start looking a lot more attractive. "As a mining company, there aren't many opportunities and if you are going to grow, you're going to have to look at riskier countries," said George Cheveley, portfolio manager at commodities investor Ninety One. "Clearly, after Russia-Ukraine people are more sensitive to geopolitical risk and you cannot predict which projects are going to work out and which are not," he added.
Kabanga Nickel, a project in Tanzania, secured funding from global miner BHP in January, and CEO Chris Showalter said it is seeing increased demand from potential off-takers.
Western sanctions on Russia over its invasion of Ukraine are forcing metals supply chains to reconfigure along geopolitical lines, Showalter said. "Not everyone's going to be able to get clean battery metals from a friendly jurisdiction, so I think some difficult decisions will have to be made, and it is going to force people to make some new decisions about where they want to source."
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