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AfricaMoney | October 17, 2017

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Mining Investment Guide: Eight South African countries in top 20

Mining Investment Guide: Eight South African countries in top 20

South Africa, Zimbabwe, Namibia, Botswana, Mozambique, Zambia, Madagascar and Malawi figure among the top 20 “most exciting African mineral jurisdictions” (Image: Drives South Africa)

South Africa, Zimbabwe, Namibia, Botswana, Mozambique, Zambia, Madagascar and Malawi figure among the top 20 “most exciting African mineral jurisdictions” according to an investment guide released at the ongoing African Mining Indaba.

The “Mining in Africa: Country Investment Guide” was released yesterday at Cape Town, which is currently hosting the landmark event on mining in the African continent.

The investment guide combines the Singapore-based Global Business Reports and Mining Indaba LLC in which five regions of the African continent namely Central Africa, East Africa, North Africa, Southern Africa and West Africa – covering around 53 countries in all – are examined.

These eight countries have been divided into two groups: those offering a low-risk environment with proven geological potential and those offering greater risk yet less exploited mineral resources.

The investment guide observed that increased mechanization of the local mining sector could be advantageous.

South Africa continues to be the leader in the African mineral production scape despite ongoing labour disputes and a decrease in the country’s production over the last two years. As Johannesburg is the centre of the African mining sector, 50 per cent of JSE-listed mining issuers have either their primary or secondary projects abroad mainly in Africa.

On Botswana, the investment guide noted that the South African economy’s infrastructure needs to be further developed to widen its potential in mining.

The guide also noted that Namibia is seen as one of the few African states that created an official strategy for engaging with emerging economies and heralded the arrival of Chinese investment into Africa.

Despite Zimbabwe being ‘the most uncertain jurisdiction for any type of investors’, the guide noted that there are certain points which were in its favour. Some such pros for investments in Zimbabwe are last year’s ‘peaceful’ elections and the country’s undeniable mineral potential as an estimated 30 per cent of the world’s diamond reserves as well as substantial deposits of gold, platinum group metals and coal are found there.

Mozambique and Malawi are considered slightly higher risk investment destinations because their mining sectors are immature but at the same time, Mozambique benefits from its coal sector and Malawi from its production of uranium and other strategic minerals.

The guide forecast a bright future for the mining sector, observing that revoked tax incentives, more mining royalties as well as severe laws regarding financial reporting have been insufficient to substantially stop investment.

The Democratic Republic of Congo, Kenya, Rwanda, Tanzania, Uganda, Burkina Faso, Cote d’Ivoire, Ghana, Guinea, Niger, Nigeria, and Senegal are the other countries which earned a position in the guide’s “top spot” investment category.

Meanwhile, for the three-day Mining Indaba event, South Africa’s Mineral Resources Minister Susan Shabangu welcomed 8,000 delegates representing 2,100 international companies and 110 countries in the morning today.

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