September 10, 2007
Pity Australia Did Not Awake To Mining Potential Of African Countries Earlier
Source: www.minesite.com/aus.html
In the very recent past Australian mining companies who ventured into Africa got short shrift from local investors. Basically that is the reason why Anvil Mining, Equinox Resources and Red Back Mining took additional listings in Canada where money was more forthcoming and ratings were higher. The trend has changed, however, and at the Africa DownUnder conference in Perth last week there was a huge attendance and it was reported that no fewer than 125 ASX listed resource companies are now operating in African countries.
As one of the organisers reported “the Australian contingent in Africa is now starting to generate a string of mining success stories and this is having a flow-on effect of attracting new Australian players to Africa’s underdeveloped mineral opportunities. While this success profile is not much more than five years old, as most had humble beginnings, little cash in the bank and few believers – the new breed of Australian-African exploration and mining partnerships is proving that Africa is far less ‘hot and scarey’ than this popular but increasingly outdated stereotype.”
There is clearly still a degree of ignorance, however, even among the organisers of the Conference, when they say that Australia also recognises that Africa it is not one, single amorphous mass, but individual states keen on attracting foreign investors able to work within black empowerment protocols. For a start Africa is made up of 51 different countries, not states, with their own governments and languages and only South Africa has so far introduced black empowerment. Some of these countries are keener on outside investment than others; some have a pretty shakey legal and political systems; some have more or less infrastructure; but most have highly prospective mineralization.
It therefore tends to be unwise to generalise about Africa as a whole. Nevertheless Roger Donnelly, chief economist of the Australian Government’s Export Finance and Insurance Corporation contends that greater stability across Africa is contributing to that continent’s resources boom. He noted that at least 13 countries had significantly improved their stability ratings by last year compared to their standing in 1996. As a result Foreign Direct Investment inflows into Africa are booming, if from a low base, and had nearly tripled by late last year with South Africa and Egypt as the biggest beneficiaries.
Again he slightly missed the point. South Africa and Egypt have long outpaced most of the rest of the countries in Africa as South Africa was once the biggest gold producer in the world and Egypt has long had a strong economy based on products other than mining. In fact apart from two Australian companies, Centamin Egypt and Gippsland, little exploration has taken place there in modern times. South Africa, of course, is the land of Black Empowerment and its misuse has deterred many companies from getting involved there. Mr Donnelly ended up on a slightly patronising note by saying that “Africa now measures up okay internationally and its World Bank ratings performance is no worse than some of its competitors outside Africa such as Papua New Guinea, Laos, the Philippines and Indonesia.”
Again a tone of generalisation creeps into his comments as it does when he says that debt relief has been a contributing factor to Africa’s greater stability as well as conflict resolution and better economic performance. The Democratic Republic of Congo is a case in point as there is still conflict in the north west of this huge country, but it does not affect Equinox and Anvil down on the Zambian border, nor Mawson West in its joint venture with Anvil in Katanga province. What he failed to mention was that Australia is quite late into Africa, well behind Canada and the UK, but it is China that has really made the running and will end up with some of the best mining projects as a reward.
Driven by its demand for raw materials China moved much more quickly in many African countries that its rivals around the world. According to Standard Bank there are now 700 Chinese companies active in nearly 50 of the African countries which means that there are very few exceptions. Small wonder that exports to China have risen by 40 per cent every year since 2002 and there are clear signs that China is intent on acquiring primary production of oil and metals as world prices rise. Unlike the US, which always seems intent on exerting influence through loans and political interference, the Chinese get to the nitty-gritty by installing railways, roads, water pipelines and other vital infrastructure.
Credit should be given to Australian companies such as Resolute, Adamus, Gryphon, AIM Resources, Paladin, Albidon and Zambezi Resources which have been working in various countries of West Africa for some time, but there is room for plenty more. And one thing they can be sure of is that they will get a good hearing in London as their projects become more advanced.
Pity Australia Did Not Awake To Mining Potential Of African Countries Earlier
Source: www.minesite.com/aus.html
In the very recent past Australian mining companies who ventured into Africa got short shrift from local investors. Basically that is the reason why Anvil Mining, Equinox Resources and Red Back Mining took additional listings in Canada where money was more forthcoming and ratings were higher. The trend has changed, however, and at the Africa DownUnder conference in Perth last week there was a huge attendance and it was reported that no fewer than 125 ASX listed resource companies are now operating in African countries.
As one of the organisers reported “the Australian contingent in Africa is now starting to generate a string of mining success stories and this is having a flow-on effect of attracting new Australian players to Africa’s underdeveloped mineral opportunities. While this success profile is not much more than five years old, as most had humble beginnings, little cash in the bank and few believers – the new breed of Australian-African exploration and mining partnerships is proving that Africa is far less ‘hot and scarey’ than this popular but increasingly outdated stereotype.”
There is clearly still a degree of ignorance, however, even among the organisers of the Conference, when they say that Australia also recognises that Africa it is not one, single amorphous mass, but individual states keen on attracting foreign investors able to work within black empowerment protocols. For a start Africa is made up of 51 different countries, not states, with their own governments and languages and only South Africa has so far introduced black empowerment. Some of these countries are keener on outside investment than others; some have a pretty shakey legal and political systems; some have more or less infrastructure; but most have highly prospective mineralization.
It therefore tends to be unwise to generalise about Africa as a whole. Nevertheless Roger Donnelly, chief economist of the Australian Government’s Export Finance and Insurance Corporation contends that greater stability across Africa is contributing to that continent’s resources boom. He noted that at least 13 countries had significantly improved their stability ratings by last year compared to their standing in 1996. As a result Foreign Direct Investment inflows into Africa are booming, if from a low base, and had nearly tripled by late last year with South Africa and Egypt as the biggest beneficiaries.
Again he slightly missed the point. South Africa and Egypt have long outpaced most of the rest of the countries in Africa as South Africa was once the biggest gold producer in the world and Egypt has long had a strong economy based on products other than mining. In fact apart from two Australian companies, Centamin Egypt and Gippsland, little exploration has taken place there in modern times. South Africa, of course, is the land of Black Empowerment and its misuse has deterred many companies from getting involved there. Mr Donnelly ended up on a slightly patronising note by saying that “Africa now measures up okay internationally and its World Bank ratings performance is no worse than some of its competitors outside Africa such as Papua New Guinea, Laos, the Philippines and Indonesia.”
Again a tone of generalisation creeps into his comments as it does when he says that debt relief has been a contributing factor to Africa’s greater stability as well as conflict resolution and better economic performance. The Democratic Republic of Congo is a case in point as there is still conflict in the north west of this huge country, but it does not affect Equinox and Anvil down on the Zambian border, nor Mawson West in its joint venture with Anvil in Katanga province. What he failed to mention was that Australia is quite late into Africa, well behind Canada and the UK, but it is China that has really made the running and will end up with some of the best mining projects as a reward.
Driven by its demand for raw materials China moved much more quickly in many African countries that its rivals around the world. According to Standard Bank there are now 700 Chinese companies active in nearly 50 of the African countries which means that there are very few exceptions. Small wonder that exports to China have risen by 40 per cent every year since 2002 and there are clear signs that China is intent on acquiring primary production of oil and metals as world prices rise. Unlike the US, which always seems intent on exerting influence through loans and political interference, the Chinese get to the nitty-gritty by installing railways, roads, water pipelines and other vital infrastructure.
Credit should be given to Australian companies such as Resolute, Adamus, Gryphon, AIM Resources, Paladin, Albidon and Zambezi Resources which have been working in various countries of West Africa for some time, but there is room for plenty more. And one thing they can be sure of is that they will get a good hearing in London as their projects become more advanced.
