During the first day of the London Indaba, on June 25, held under the theme “Investing in Resources and Mining in Africa”, panel discussions unpacked what the continent’s mining jurisdictions could do to make the industry more attractive, the challenges of reduced available finance and how international stakeholders are partnering with African operators in pursuit of critical minerals and metals supply.
Moshe Capital founder and CEO Mametja Moshe highlighted that Africa presented a compelling case for investment, owing to its growing youth population, high-grade resources that could be exploited using new technology to engender lower costs and available land to support elements such as renewable-energy projects.
She acknowledged that there were challenges, with infrastructure being the biggest. However, Moshe said these could present an opportunity for mining companies to partner with government and/or infrastructure funds.
Public-private partnerships had been proven to work, such as at the Richards Bay Coal Terminal in South Africa, she noted.
Another challenge was that of security, which Moshe said could be addressed through partnerships with communities, who would provide social security to companies operating in these jurisdictions.
ARCH Emerging Partners MD Amanda van Dyke pointed out, however, that Africa needed to do more if it wanted to bolster its participation in the critical minerals industry, given that it was competing with the rest of the world and against well-established mining jurisdictions to supply these minerals.
She emphasised that governments on the continent needed to incentivise the development of green supply chains, as was being done in other countries, to allow them to compete.
Van Dyke outlined a checklist for countries to pursue to attract investment in the mining industry and in the critical minerals subset, namely, allowing bilateral financing; having the requisite infrastructure; having access to energy, preferably low cost and low carbon; having access to capital to develop projects fully; boasting a skilled workforce; and having good mining code that could compete against global peers.
While she acknowledged that it was tough to meet all of these requirements, she highlighted that many countries were stepping up to the plate, and that the best projects on the continent that were being financed were in these jurisdictions.
Meanwhile, Organisation for Economic Cooperation and Development Mineral Supply Chains sector lead Benjamin Katz indicated that responsible mining standards were levelling the playing field for both countries and companies.
For the former, he said that standards were intended to enable companies to invest and engage in countries regardless of the risk profile, and in a responsible manner.
For the latter, these required they be held to the same standards. Katz said that while there was policy and market legislation that aimed to engender this consistency, it was not yet there in terms of practice, with the system still a bit leaky.
Former Vale executive Deshnee Naidoo, meanwhile, said Africa could learn a lot from countries such as Canada that have undertaken considerable work to become mining-friendly, with funding from government, buy-in from all stakeholders, and relationships with Indigenous communities.
On the other hand, she said the continent could also provide learnings for other jurisdictions, including on its work in transformation. While this was not yet at the level desired, Naidoo highlighted that some regulations had worked.
Centre for Strategic and International Studies Project on Critical Minerals Security director Dr Gracelin Baskaran added that the US could learn a lot from South Africa, especially in terms of developing mining talent, with the mining workforce in the former being limited.
Speakers also mentioned challenges around financing, with reports showing that mining funding had been scaled back in the last decade.
Resource Capital Funds partner and credit strategy head David Halkyard explained that securing funding depended on the cycle of the project, with exploration presenting a particularly difficult area.
Société Générale Europe, Middle East and Africa Metals and Industries head of mining Christophe Roux said projects required significant investment before they were sufficiently derisked and able to repay debt, and this was where the shortfall occurred.