Scramble for rich deposits
AFRICA is beckoning for mining and infrastructure-related project specialists, as companies seek expansion as part of a diversification strategy to offset economic uncertainties in SA.
Digby Glover, CEO of TWP Holdings, believes the big focus areas ahead will be aligned with TWP’s strategic focus areas in the rest of Africa.
“Africa still presents huge opportunities — as do South America and Australia — with its wealth of mineral deposits.
“There is also a huge amount of interest in gold at this stage, both from local and offshore businesses, who are wanting to get their gold projects up and running as quickly as possible, given the favourable gold prices that have been experienced of late.”
Glover says that gold is traditionally a hedge against international economic uncertainty, “which is what has been driving the efforts by gold mining companies to push up their production profiles”.
Also on the gold mining front, GM for TWP’s Africa portfolio, Henry Jonker, says the company is building a gold mine for AngloGold Ashanti in Mongwalou, in the north-east of the Democratic Republic of Congo, in mountainous terrain, “where the longest runway we could fit in is 600m long. The mindset has to be different in areas such as these when operating in Africa.”
On infrastructure development, Glover says: “There is no country in Africa — if not in most areas of the world — that has the level of infrastructure, even as it currently stands, that SA has.”
He says that while the government’s long-awaited multibillion-rand infrastructure expansion programme in SA will put pressure on the availability of skilled resources for mining work, “it will benefit companies such as ourselves who have our fingers in multiple pies, both in infrastructure as well as in mining-related projects”.
Glover says that coal is also very much a stable commodity “because there is a real and immediate demand for coal to meet energy requirements. There is also an increasing trend for South African businesses to become involved in what could turn out to be very large iron ore projects elsewhere in Africa,” he says.
“And there is a lot of work currently going on in central and West Africa to help with that expansion.”
The situation is similar with demand for copper. Glover says the Democratic Republic of Congo is a good case study for what needs to happen in Africa.
“The Democratic Republic of Congo has astronomic copper resources and, by any yardstick, should be an incredibly wealthy nation. It’s striking how much wealth is obviously in the ground, yet how much poverty is on the surface.
“Potentially there is huge wealth. But it needs stability and investment to unlock it.”
Meanwhile, Lonmin, the world’s third-largest platinum producer, has been active in community investment initiatives in the area around its operations in the North West — known as the Greater Lonmin Community, or GLC.
“The development of all communities around our mining operations both in Marikana and Limpopo, as well as our major labour sending areas, is an essential element of our transformation programme,” says Barnard Mokwena, executive vice-president: human capital and external affairs.
“Between 2007 and 2011, we have spent a total of R194m in the GLC and our major labour sending areas. In 2012 we have increased our spend to R71m.”
Lonmin’s community investment programme covers four main areas, which is in line with the requirements of the Mining Charter: education and community skills; health; local economic development; and enterprise development.