Market Overview

Over the last decade, Africa has become central to foreign direct investment as it enjoys unrivalled wealth of mineral resources and investment opportunities. The African continent contains an estimated 30% of global mineral resources, including bauxite, cobalt, copper, chromite, gold, graphite, iron ore, manganese, nickel, phosphate, platinum-group elements (PGE), potash, rare earth elements (REE), and zircon, to just name a few - in addition to coal and diamonds. It is estimated that natural resources have accounted for about 35% of Africa's growth since 2000.

International investors and mining companies still remain cautious owing to Africa's many challenges: lack of infrastructure, power, and education; political instability, corruption, and health issues. However, Africa's long term potential is increasingly in the spot light. It is the world's second-largest and second most populous continent after Asia, and the fastest growing part of the world. By 2050, Africa will be home to 20% of the world's population and its workforce continues to increase. The continent's economy is projected to grow at a rate of 6.0% in 2015. Among the ten countries that were the fastest-growing economies in 2014, four are African, thanks to their economic boost from mineral resources. Most foreign direct investment is related to resource activities. China and India in particular show a growing appetite for African mineral resources.

The mining and quarrying of some 60 mineral products currently represents around 20% of Africa’s economic activity, while minerals are the continent’s second-largest export category – worth 10% of the continent’s total exports – only exceeded by hydrocarbons. More than 80% by value of these mineral commodities originate in just five countries: platinum leader South Africa; diamond-rich Botswana; as well as gold producers Ghana, Burkina Faso and Tanzania. The African continent contributed 6.5% of the world’s mineral exports during 2011 from mining 20% of the world’s land area. From a regional perspective, members of the Southern African Development Community (SADC) produce two thirds of Africa’s mineral exports by value. The biggest player in the region is South Africa (the continent’s largest economy at present) who has almost all the commodities essential for international competition except crude oil and bauxite. Together with its northern neighbour Zimbabwe, these two economies hold the majority of the world’s platinum group metals (PGMs) reserves. To the west of Zimbabwe is the diamond-rich Botswana – who is the world’s largest producer by value of these precious stones – and to its north Angola. Other key mineral producers in the region are Namibia (uranium), Zambia (copper) and the Democratic Republic of the Congo (copper and cobalt). East African Community (EAC) has several mineral belts that produce (amongst other commodities) tanzanite and gold. The latter is the region’s biggest mining resource with Tanzania being the largest regional miner of the yellow metal at present, while exploration has also been conducted in the country for nickel and uranium. Gold reserves in the country are estimated to be over 30 million ounces, with only a small part of it currently being mined. These reserves equate to nearly 850 tonnes of gold, which at current production levels imply a lifespan of over 20 years left for gold mining bar any significant new discoveries. Burundi also has some gold reserves along with copper, cobalt, nickel and uranium deposits, though commercial extraction is also focussed on gold. Exploration activity in western Kenya has increased significantly over the past few years, with The East African writing in November 2011 that a “gold rush” is expected in the country within the next decade. Furthermore, Kenya’s first ever large-scale mine – the Kwale mineral sands project –will commence production later this year. Central and West Africa is increasingly being seen as boom areas for iron ore exploration and mining. Historians will point to the fact that current and short-term future activity is on such a scale that it reminds of colonial-era scurrying to exploit the region’s minerals. Back then, as now, the area is seeing a significant increase in railway construction in order to ferry ore from the hinterland to ports – some of which will also be built from scratch. This revival in rail transport options has led to the opening of mines in Guinea, Liberia, Sierra Leone and elsewhere.
Market Overview

Over the last decade, Africa has become central to foreign direct investment as it enjoys unrivalled wealth of mineral resources and investment opportunities. The African continent contains an estimated 30% of global mineral resources, including bauxite, cobalt, copper, chromite, gold, graphite, iron ore, manganese, nickel, phosphate, platinum-group elements (PGE), potash, rare earth elements (REE), and zircon, to just name a few - in addition to coal and diamonds. It is estimated that natural resources have accounted for about 35% of Africa's growth since 2000.

International investors and mining companies still remain cautious owing to Africa's many challenges: lack of infrastructure, power, and education; political instability, corruption, and health issues. However, Africa's long term potential is increasingly in the spot light. It is the world's second-largest and second most populous continent after Asia, and the fastest growing part of the world. By 2050, Africa will be home to 20% of the world's population and its workforce continues to increase. The continent's economy is projected to grow at a rate of 6.0% in 2015. Among the ten countries that were the fastest-growing economies in 2014, four are African, thanks to their economic boost from mineral resources. Most foreign direct investment is related to resource activities. China and India in particular show a growing appetite for African mineral resources.

The mining and quarrying of some 60 mineral products currently represents around 20% of Africa’s economic activity, while minerals are the continent’s second-largest export category – worth 10% of the continent’s total exports – only exceeded by hydrocarbons. More than 80% by value of these mineral commodities originate in just five countries: platinum leader South Africa; diamond-rich Botswana; as well as gold producers Ghana, Burkina Faso and Tanzania. The African continent contributed 6.5% of the world’s mineral exports during 2011 from mining 20% of the world’s land area. From a regional perspective, members of the Southern African Development Community (SADC) produce two thirds of Africa’s mineral exports by value. The biggest player in the region is South Africa (the continent’s largest economy at present) who has almost all the commodities essential for international competition except crude oil and bauxite. Together with its northern neighbour Zimbabwe, these two economies hold the majority of the world’s platinum group metals (PGMs) reserves. To the west of Zimbabwe is the diamond-rich Botswana – who is the world’s largest producer by value of these precious stones – and to its north Angola. Other key mineral producers in the region are Namibia (uranium), Zambia (copper) and the Democratic Republic of the Congo (copper and cobalt). East African Community (EAC) has several mineral belts that produce (amongst other commodities) tanzanite and gold. The latter is the region’s biggest mining resource with Tanzania being the largest regional miner of the yellow metal at present, while exploration has also been conducted in the country for nickel and uranium. Gold reserves in the country are estimated to be over 30 million ounces, with only a small part of it currently being mined. These reserves equate to nearly 850 tonnes of gold, which at current production levels imply a lifespan of over 20 years left for gold mining bar any significant new discoveries. Burundi also has some gold reserves along with copper, cobalt, nickel and uranium deposits, though commercial extraction is also focussed on gold. Exploration activity in western Kenya has increased significantly over the past few years, with The East African writing in November 2011 that a “gold rush” is expected in the country within the next decade. Furthermore, Kenya’s first ever large-scale mine – the Kwale mineral sands project –will commence production later this year. Central and West Africa is increasingly being seen as boom areas for iron ore exploration and mining. Historians will point to the fact that current and short-term future activity is on such a scale that it reminds of colonial-era scurrying to exploit the region’s minerals. Back then, as now, the area is seeing a significant increase in railway construction in order to ferry ore from the hinterland to ports – some of which will also be built from scratch. This revival in rail transport options has led to the opening of mines in Guinea, Liberia, Sierra Leone and elsewhere.