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42 E&MJ; • MARCH 2014 www.e-mj.com Africa Remains an Important Destination for Mining Investment Failed policies and ongoing issues in South Africa put a damper on a discussion that should otherwise be upbeat By Gavin du Venage, South African Editor The African Mining Indaba 2014 took place, as usual, under the beneficent shad- ow of Table Mountain in Cape Town, a venue far removed from the somber events taking place far to the north. Each year crit- ics of the annual industry jamboree attack the conference for its remoteness from the harsh realities taking place in the gold and platinum belt of the Witwatersrand. This is perhaps the point; to provide a setting where delegates can conduct business away from the frenetically evolving events in the South African mining belt. As the conference opened, more than 90,000 platinum workers remained on strike, the memory of the Marikana mas- sacre the year before adding an edge to already fraught industrial relations. The fourth and final day of the event had dele- gates wake to the news that nine mineworkers had died during a seismic event 1.7 km underground at Harmony's Doornkop gold mine in Carltonville. These events had a sobering effect on the 8,000 or so men and women gathered at the Cape Town International Convention Centre. Yet the Indaba, billed as the world's largest mining investment gather- ing, moved forward to serve its central pur- pose—bringing miners and funders togeth- er. Money is the lifeblood of the industry and without it, mining would cease to exist. Mining Indaba's managing director, Jonathan Moore, tried to capture the indus- try's dilemma of having to balance humani- tarian objectives and hard-nosed business. "We come together each year at the Indaba because we are committed to advancing mining on the African continent," Moore said in his opening address. He noted the event was a catalyst for the investment of bil- lions of dollars of foreign direct investment across the continent, a result of 20 years of facilitating deals that have changed the face of African mining and strengthened the con- tinent dramatically as a global player. Moore can produce an impressive array of numbers to back up his assertion. By 2012, global mining exploration budgets had reached an all-time high of $20.5 bil- lion, increasing by 19% against the previous year. He noted that Africa had leapfrogged Canada to take the second-largest slice of the global exploration pie. For some coun- tries, the investment has been exceptional. The Democratic Republic of Congo headed exploration spending for the second time in three years. West Africa also received intense interest, particularly with regard to gold. In South Africa, mining still accounted for 19% of private-sector investment in 2012 and about 12% of total investment in the economy. This directly produced 8.3% of gross domestic product (GDP), though indirect multiplier and induced effects more than doubled mining's impact on the economy to about 17%, Moore said. Countries across Africa also form about a quarter of the nations supplying China's resource-hungry infrastructure program. In 2004, about 1,500 delegates attended the Indaba, representing about 50 countries, and about 150 exhibits were staged. By the decade's end, this had dou- bled to about 3,000 delegates and this year around 7,800 attended. They repre- sented 2,100 international companies from more than 110 countries, with about 500 sponsoring companies and 40 African government delegations. Shabangu Fails to Impress "The late great Nelson Mandela once said that anyone can rise above their circum- stances and achieve success if they are passionate about what they do," Moore said. "This is why we are here today." Moore's sentiments and the obligatory Mandela quote were doubtless meant to dispel some of the creeping gloom that infected many of the delegates. While lis- teners were inclined to accept his words at face value, they gave a more wary reception to those of Susan Shabangu, South Africa's mineral resources minister. To say her record in office is mixed would be kind. Shabangu's four-year tenure has been characterized by an almost total breakdown in communication between her department and the industry. At the same The African Mining Indaba remains the continent's top mining investment event. M I N I N G I N D A B A 2 0 1 4 EMJ_pg42-45_EMJ_pg42-45 2/28/14 9:17 AM Page 42