Mining is one of Africa’s most significant export industries. Natural resources make up approximately 60% of South Africa’s exports and are a substantial driver of its economic development. Though the continent initially garnered fame for its gold rushes and diamond mines, the African mining industry has since become one of the world’s largest producers of metals such as platinum, copper, iron ore and uranium, among others. But what is the forecast for Africa’s commodity market in 2019 and beyond?
Real-world events and evolving market conditions are shaping the landscape of the mining industry. The uranium market is predicted to experience an uplift due to increased demand for nuclear energy, while technological innovations such as the electric car revolution are set to increase demand for battery metals, creating new opportunities in the mining sector. Unregulated mining, unsafe working conditions and environmental damage have led to increased pressure to create environmentally and socially sustainable mines, especially among top industry players who are looking to change their reputation.
These pertinent issues affecting the future of African mining will be debated at next year’s Mining Indaba, the world’s largest mining investment event, taking place in Cape Town from 5 – 8 February 2018.
The main stage will feature a full programme of keynote speeches and corporate presentations by CEOs and senior executives of some of the world’s largest international mining companies such as Rio Tinto, Vedanta and Anglo American.
Predicting commodity markets
Panel sessions will focus on in-depth analysis of South Africa’s leading commodity markets, with Invesco Portfolio Manager Norman Macdonald looking at the long-term outlook of the gold market and how this might be affected by future contracts with China.
Anthony Milewski (MD, Pala Investments) and William Adams (Head of research, Metal Bulletin) will examine the supply and demand changes of the cobalt and lithium markets, and how these may be affected by increased demand from car manufacturer Tesla as they invest in electric vehicles (EVs). Today around 14% of lithium demand comes directly from the EV sector, with this percentage predicted to rise to 38% in 2025. Zimbabwe is a key exporter of lithium and allegedly holds one of the world’s largest known deposits of the element.
Cobalt demand is also expected to rise, creating opportunities in the Democratic Republic of Congo (DRC) which has an abundance of cobalt deposits. With this sharp rise in demand however comes increased pressure to expand the supply side, leading to concerns over how this will impact the environment, worker’s rights and local communities.
The main stage will also play host to a keynote head to head debate: ‘Copper vs. Gold: which is the better investment case?’ Mark Bristow (CEO, Randgold Resources) will be arguing the case for gold, having had decades of experience leading a multinational gold mining company. He will be pitted against Robert Friedland (Founder, Ivanhoe Mines) who is a major player in the mining industry and believes that a green revolution will cause a spike in copper prices, as it has the highest conductivity of any non-precious metal and is an important element in all energy production as well as in the manufacturing of EVs.
A sustainable future
On the sustainability front, Roy Harvey (CEO, Alcoa) will be discussing whether it’s possible to build the perfect mine that doesn’t leave environmental or social scars. He’ll be examining how mining companies can look beyond profitability to create shared value for the communities that depend on them, and how viable this is for the industry.
The topic will also be tackled on the financial side by investor Todd Warren (Head of Global Resources, Colonial First State) and Glenn Mullan (President, PDAC) who will be focusing on junior miners and the challenges they face when it comes to international environmental and social performance standards. They will be defining the term ‘sustainable and inclusive investment’ while looking at how managing sustainability factors can increase financial return.
But what steps need to be taken to successfully implement a programme of sustainable development? Many in the industry believe that partnerships between mining companies, governments and communities are the key, a theme which will be addressed in a keynote speech by Olusegun Obasanjo (Former president, The Republic of Nigeria and Chairman, The Brenthurst Foundation) who works with African governments to develop policies and ideas to strengthen Africa’s economic performance.
Collaborative action is vital for ensuring that the mining industry is responsive to the needs of the people it affects, allowing it to make a positive socio-economic impact and foster development across Africa. Though this topic will be covered in more detail during the Sustainable Development Day, the key points will be brought forward in a panel discussion with industry experts including Tom Butler (President and CEO, International Council on Mining and Metals) and the Hon. John Peter Amewu (Minister of Lands and Natural Resources, Ghana). They will be examining the tangible results already achieved and looking at which areas will require the most work to help Africa achieve its sustainable development goals.
The intergovernmental summit
The event’s intergovernmental summit will address the sustainability issue by aiming to increase collaboration and discussion between African and international governments. This year 18 African mining minsters will be in attendance from countries including Zambia, Zimbabwe, Senegal, Sudan and Mali, amongst others, alongside a total delegation of 30 African ministers expected at the event.
They will be gathering to discuss how they can help build a successful future for African mining by aiming to enhance transparency, learning from successful case studies in South America, partnering with western governments to invest in new projects and using the mining industry as a tool for social and economic transformation across the continent.
While technological innovations such as electric vehicles are set to rapidly increase demand for certain commodities and lead to growth in the African mining sector in the next few years, it’s also important to reflect on the impact such growth will have on the environment and local communities. The mining sector is essential for producing the metals and minerals we need for our way of life, and there will always be risk attached, but it also has the potential to do so in a way that benefits society with more than just economic profit.
Want to learn more?
If you’re interested in learning more about this topic, attend Mining Indaba next February in Cape Town to meet +220 mining companies and +350 investors. Register online at www.miningindaba.com with code MRA100 to save £100 off your conference pass.