Africa's hope lies in exploration
Exploration is at the heart of mining. Nobody can build a mining company without exploration. The greatest mining companies in Africa today invested in top geologists and exploration projects many years ago. The geologists' brief was simple: hunt down and find the next best deposit. These geologists had flair, a spirit of adventure and a great appetite for taking risks, as had the companies that employed them. Mark Bristow, CEO of Randgold, perhaps epitomises this pioneering spirit best of all. Through continuously investing in exploration, Bristow has been able to find exceptional ore bodies which enabled him to develop extremely profitable mining operations in regions of Africa most were hesitant to enter at the time that he did. Bristow was lightyears ahead of his compatriots. He realised that Africa not only presents huge opportunities, but that exploration is the bedrock on which the African mining industry will be built.
With commodity prices on an upward curve, and a business friendly philosophy taking root in Africa, now is the time to get the hands and boots dirty. Countries like Sierra Leone, Liberia, Zimbabwe, South Africa, Angola and Senegal presents prodigious opportunities for geologists and exploration entrepreneurs. The recent Zimbabwean, Nigerian and Angolan offensives to lure investors has paid off, and more and more junior exploration companies are enquiring about opportunities in these countries. Towards the end of last year (before the regime change), the Zimbabwean government had only awarded three new exploration licenses. Today, a mere five moths later, more than 100 permits have been issued. New Zimbabwean Minster of Mines Winston Chitando, recently assured a room full of investors and exploration companies at the inaugural Harare Indaba in Johannesburg, which I attended, that they would be welcomed back into the country with open arms. More alluring though is Angola, which hosts prolific copper, iron ore, gold and diamond deposits.
Up until now Angola has been a bit of an enigma in terms of mining. But the countries' new Minister of Mineral Resources and Petroleum, Dr. Diamantino Pedro Azevedo (a mining engineer) presented some enticing information acquired through solid geological surveys at a recent presentation, to which I was invited. What's more, the Angolan government is now pursuing private investors, in a bid to broaden its mining base.
Barely a month after Azevedo promised that there are great opportunities for exploration, a few Canadian juniors announced that they are wetting their toes in Angolan waters. Moreover, the Nigerian drive to diversify has tempted several explorers to take on that massive unchartered territory. The big constraint though, especially for African exploration companies, remains financing. At the moment their only option is to raise money on the London, Canadian or Australian Stock Exchanges. For now, it seems that African investors just don't want to walk that extra mile to fund high-risk exploration projects on their own continent, and it's a shame. Until they do that, it is highly unlikely that we will see homegrown African mining companies dominating the African mining scene.
About Leon Louw:
Leon specializes in African affairs and doing business in Africa, and has been writing about mining in Africa for 8 years. He was born in Johannesburg, South Africa, and has traveled Africa extensively, especially southern Africa. He has a BA degree with a specialization in African studies and an honours degree in Africa Politics. He also have a national diploma in Nature Conservation and an honours degree in Environmental Management. It is is passion to promote business in Africa and I can assist companies that are interested in doing business in African countries.
You can see his work at African Mining and Mining Mirror and online at http://www.miningafricaonline.co.za/.