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August Updates

African Mining on the Rise: Untapped Resources

Over the recent years, many African countries have seen major progress in the mining sector. Mining has always been a key contributor to many African economies but currently the governments and mining companies are implementing strategies to contribute to society through skills development and environmental protection policies. African mining countries are also incentivising foreign investment through attractive mining sector policies, tax deductible costs, etc. With mining investments expanding in Africa, strategies to maximise sustainable and economic outcomes and corporate social responsibility (CSR) have become more relevant.

Zambia: Zambia’s mining sector governance and long history of mining makes the extractive sector a significant source of government revenue and formal employment, both directly and indirectly. Rising copper prices will also trigger an increase in the mining activity and increase foreign investment into new projects. UNITED Nations Development Programme (UNDP) Country representative Janet Rogan has said additional investments in unexploited sectors like mining in areas like Luapula Province would contribute to strengthened economic activity. Economic development in the extractive sector is important to national job creation efforts as mining accounts for 12% of Zambia’s GDP and 70% of export value.  The sector is also continuing to attract investment which is crucial to the country’s growth since it constitutes 62% of foreign direct investment. 

Mali: Though the country holds 822t of gold reserves, only size of Mali’s 133 potentially gold reserves have been exploited. Therefore, offering massive growth opportunities for the country’s mining sector. Mali will benefit from many upcoming projects in 2017 especially gold sector. B2Gold’s Fekola project is due to start in October 2017, and Hummingbird’s Yanfolila project inQ4, 2017. Simultaneously, the country’s flagship Loulo-Gonkouto mining complex, owned by Randgold Resources, aims to produce over 600 000 ozpa for at least the next decade.

Côte d’Ivoire: Côte d’Ivoire is another Sub-Saharan country that is emerging as a key mining nation in the following years with a strong pipeline of projects and huge untapped resources. The country is an attractive investment destination due to its favourable regulatory environment and solid infrastructure developments. The new mining code encourages greater transparency in the permit allocation procedures. BMI forecasts Côte d’Ivoire to post average annual mining industry value growth of 15.6% over 2017 to 2021, putting it amongst the likes of top mining markets.

Senegal: Recent discovery of the nearby Sofia’s deposit has been incorporated by one of Randgold Resources’ exploration projects in Senegal. This has increased Massawa’s viability due to it’s cost effectiveness and high-recovery ore. Massawa has a mineable reserve of 2.6 Moz and the project has an internal rate of return of 18% at a gold price of $1 000/oz.

Guinea: The Guinean economy is expected to grow in 2017 supported by increased activity in the mining sector. Guinea possesses the world’s largest reserves of bauxite and largest untapped high-grade iron ore reserves, as well as gold and diamonds. Exports of Bauxite and gold is forecasted to increase further in 2017 and imports would continue to be sustained owing to the projects to increase production capacity in the mining sector and investment in infrastructure.

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