Engineering & Mining Journal

MAR 2014

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

Issue link: https://emj.epubxp.com/i/271090

Contents of this Issue

Navigation

Page 45 of 83

44 E&MJ; • MARCH 2014 www.e-mj.com M I N I N G I N D A B A 2 0 1 4 Africa Rising As in the past few years those seeking cheer had to turn their gaze beyond South Africa, and look to the north. Africa as a whole is demonstrating good prospects and a settling environment that encourages investment. A heartening development announced at the Indaba is the World Bank's plan to spend upward of a billion dollars mapping Africa's resources. "There is yet an enormous amount of wealth left to discover," said Tom Butler, global head of mining for the World Bank and International Finance Corp. "Coupled with in-country training and institutional support, and the work of exploration com- panies, this initiative will unlock the true worth of Africa's mineral endowment." The institution has already spent more than $200 million over the past decade in developing geological data on the conti- nent, but intends to drastically increase the pace. "Our planes are in the sky above Malawi as we speak, gathering geological data," he said. Butler added that foreign direct invest- ment was running at $50 billion per year, outpacing aid for the first time in modern history, a direct result of money pouring into the resources sector. He added the warning that in spite of Africa's effervescent eco- nomic growth, it needed a lot more if it was to drag itself out of perpetual poverty. "A good decade of growth does not translate into universal prosperity," Butler said. "We need to increase the pace of investment." Balancing Chinese Interests It's a good thing, then, that China's pursuit of African resources continues to blaze across the continent. "When Chinese firms consider investment destinations around the world, Africa is always top of mind," said George Fang, the head of min- ing and metals in Asia for Standard Bank, the largest bank in Africa. "Africa is usually among the first desti- nations that are considered by Chinese companies that are looking to expand internationally, not only because of its abundant natural resources but also because of its rich cultural heritage, which in many ways is more similar to Chinese custom than that of the Western world." He noted that China is still unquestion- ably Africa's largest single trading partner, with Standard Bank research estimating Sino-African trade to have reached $210 billion in 2013, up 6% from the $198 bil- lion figure that prevailed in 2012. Chinese imports from Africa, which largely com- prise hard commodities, reached approxi- mately $115 billion last year while Chinese exports to Africa totaled about $94 billion, according to Standard Bank data. For individual African countries, re- source-driven investment offers some of even the most desperate cases a lifeline— none more so perhaps than the Demo- cratic Republic of Congo, the wounded heart of Africa. Plagued by war and cor- ruption, and with vast tracts of the country with virtually no roads or power, it has an uphill task attracting investment. Yet somehow it is succeeding. "Our mining sector is flourishing," Bene M'Poko, the DRC's ambassador to South Africa, told the conference. "We are grateful for the interest shown in our coun- try and particularly to those who stuck with us through troubled times." He ticked off a list of incentives and efforts being made to draw capital—the revamping of war-damaged power stations, while new plants are to be built. The coun- try is also working to improve transparency and end its reputation as a black hole where money disappears into the pockets of the connected few. The DRC was recently given a pass by the Extractive Industries Transparency Initiative (EITI), a global project that aims to make sure tax and royalty revenue is accounted for. This, said M'Poko, had made lending insti- tutions such as the World Bank less leery when it came to dealing with the country. "The DRC will encourage any activity that leads to investment in plant, mineral extraction and manufacturing," he added. A clear indication of the DRC's attrac- tion is probably best illustrated by the con- tinued flag waving for the country by Robert Friedland, chairman of Ivanhoe Capital Corp. Friedland is the closest thing the mining world has to a rock star, having created a multibillion dollar empire by gambling on developing mines in some of the most inhospitable places on earth. He also knows how to entertain an audience. Friedland is betting big on the DRC, and is using his early success in Alaska and Mongolia to illustrate his penchant for being right. He noted that when he first considered developing the Fort Knox mine near the Arctic Circle he flew over country where "there was nothing down there but rock, ice and wolves." The resultant mine was the foundation of his fortune. Now, it was the DRC's turn. "The future is coming to you now from the DRC," Friedland said in a tone of voice closer to that of a tentpole preacher than a mining executive. "If you were to come from Mars to earth looking for copper, you'd go first to Katanga." Friedland plans to develop the Kamoa deposit in the DRC's Katanga province, which he describes with his characteristic lack of restraint as: "the world's highest grade copper deposit, an unparalleled resource the size of Europe." Other African countries are also hoping to attract that sort of attention. Nigeria is a less familiar player on the African mining scene, something the continent's most populous state hopes to change. This West African nation has drifted rather aimlessly on its oil reserves for decades and now wants to open up mineral development as well, and expand away from its dependency on crude. "We want to conclusively create an atmosphere for mining," Isaac Okorie, the assistant director of the Nigerian Geolo- gical Survey Agency (NGSA), said. Okorie was manning the NGSA's booth in the con- Robert Friedland, the closest thing the mining world has to a rock star, told the conference that the Democratic Republic of Congo was 'the future.' EMJ_pg42-45_EMJ_pg42-45 2/28/14 9:17 AM Page 44

Articles in this issue

Links on this page

Archives of this issue

view archives of Engineering & Mining Journal - MAR 2014