Africa - 150 New Mining Projects Through 2010 and Counting

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Researched by Industrial Info Resources (Sugar Land, Texas). Growth of GDP in the sub-Saharan region of Africa could rise by 6% in 2007, and in oil-exporting countries like Angola and Guinea, where production is rising, growth could accelerate past 10%, Abdoulaye Bio-Tchane, director of the IMF’s African Department said in September. Growth in oil importing countries should remain steady at an average of 4.6% and inflation is expected to fall to 6% (excluding Zimbabwe), he said.

The downside risks to the favorable picture are that export demand could be lower if activity in the rest of the world slows from the impact of global imbalances and tighter monetary policies. Growth and inflation could also be adversely affected by further increases in oil prices and a larger than expected fall in nonfuel commodity prices. Political risks remain in a number of countries in the region. Bio-Tchane said that oil-producing countries need to strengthen their fiscal institutions to enhance revenue transparency and their public financial management systems.

The African Development Bank with the OECD Development Centre reported that two thirds of Africa’s states showed the best net growth in investment for seven years in 2005-2006. They expected this trend to continue in 2007, if the weather holds. But, they said, if oil prices remain high, the threat to the continent’s oil-importing countries should not be under estimated. Metal producers such as Mozambique, South Africa and Zambia had profited from higher aluminum, iron, copper and platinum exports, which had offset oil import costs.

There are a number of large-scale initiatives to accelerate the development of mining on the continent. These include the World Bank’s private sector arm, the International Finance Corp (IFC), putting a team into the Democratic Republic of Congo (DRC) to assess projects ranging from power generation to mining and construction in the country which is rich in cobalt, diamonds, copper, uranium and other minerals. The main airport and harbor in Kinshasa are all under view. The nature of the political aftermath of the second round of national elections in October is key to the progress of projects.

Mining engineers, Murray & Roberts Cementation, have identified 32 bankable projects worth $2.5 billion in Botswana, Zambia, Ghana and Tanzania. Copper mining in Namibia, copper and gold in Ghana and Mali, and platinum in South Africa are all spawning projects. The company is able to offer experience in local conditions to companies from Australia and Canada who are streaming into African projects and claims an edge on contractors from Poland and China who are ‘aggressively entering’ the African mining scene.

Australian and Canadian companies have taken advantage of high commodity prices to increase their footprints in Africa. Canadian companies have a long slate of mining projects covering 2005-2010 that they are working on. The total investment value of the projects is $ 15.9 billion, with the Canadian share amounting to $12 billion. The projects are spread through fifteen countries in all regions of Africa from Cameroon in the west to Eritrea in the east, Mauritania in the north and South Africa. The new mines, of which nearly 40 are listed, will also create needs for power generation and infrastructure development.

Under the EU-SADC (Southern African Development Community) Investment Program (ESIPP), a team of mining consultants is currently working across the region (including Angola, DRC, Tanzania, South Africa and Madagascar) to identify high-quality exploration and mining opportunities for potential investors.

The Mines 2006 gathering in Lusaka, Zambia at the end of November will see promoters submitting projects from thirteen countries, including gold, diamonds. Over 100 project opportunities have already been submitted for selection to present in Lusaka. These cover cobalt gold, diamonds emeralds, copper, manganese, solid fuel, phosphate, tantalite, tin, niobium, lime, kaolin and mineral sands. The projects are in varying development stages from exploration to operating mines and treatment plants.

Under the average predicted GDP growth figure of 6% for the region a selection of countries show a solid center group with a few extremes such as Angola where the GDP goes from 14.3% in 2006 to 31.4% for 2007, and Zimbabwe, which moves from minus 5.1% in 2006 to minus 4.7% in 2007. In the north, Algeria moves from 4.9% in 2006 to 5% in 2007, and Egypt holds a good 5.6% for both years. In the east, Tanzania moves from 5.9% to 7.3% and Mozambique goes from 7.9% to 7%. South Africa drops from 4.2% to 4% and Zambia holds on with 6%. Nigeria moves up from 5.2% to 6.4% and Cote d’Ivoire recovers from 1.9% up to 3%.

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