Mining in Africa has constantly faced a wide range of challenges that have prevented it from reaching its true potential, but are we on the cusp of a new era of mining growth? Ina Potgieter, Managing Director of Projects IQ (Pty) Ltd, takes a closer look...
The Africa Mining IQ database, as the continent’s largest mining information service with over 1 850 listed projects, provides one of the most detailed and complete analyses available on the state of the mining industry in Africa. When analysing the data, a number of observable trends become evident.
While mining concessions have reduced in number over the last three years, there seems to be a developing maturity, both from investors and government, to approaching mining development today. Investors are far more cautious in assessing mine viability, which now includes far stricter requirements from governments with regards to social development, empowerment and so on. The result is that mining concessions are of a higher quality than they were three to five years ago, more likely to result in an operational mine. So while down on quantity, they’re certainly up on quality.
Another positive development is the slight growth in mining projects that became operational over the last year. At 13, this is double the number of projects compared to 2015, and is the first increase in projects of this type following a three-year decline. This is a very positive and encouraging development. In addition, a year ago, we had 25% of operational mines on care and maintenance. Today, this figure has reduced to 5%. As more and more operational mines begin to scale production off care and maintenance, we anticipate seeing mine expansions and refurbishments picking up again as well.
From a business development point of view, most of the recent action has occurred in gold mining, especially in East and West Africa. Burkina Faso, Ghana, Guinea, Mali, Senegal and Tanzania have shown huge growth in mining in the last six or seven years, and in Ethiopia, the number of projects currently being developed is more than double its 2013/2014 number. Sierra Leone and Zambia are also showing decent growth.
Mining, just like every other economic activity, has always gone through stages of growth and expansion. And while the downturn in commodity prices has certainly played a massive role in mining in Africa over the last several years, unchecked and over-eager investment allied to less developed concession policies have also played a role in over-developing the mining industry at a rate that was out of sync with the market.
If the developments we see in the mining industry – such as those outlined above – are indeed economic green shoots, then companies should start planning for the next five to 10 years now.
With Africa Mining IQ, businesses have access to the biggest, most in-depth mining information resource available for Africa. We track each project across its development, from grassroots to fully operational mine, and supply key contact details for each listing, giving companies a clear business advantage in bidding for new contracts.
Contact Africa Mining IQ today on +27 11 830 2132 to target business opportunities in Africa's growing mining industry!
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