The global struggle for metals is pushing Africa into the spotlight

The truck is coming out of the mine after collecting ore from 516 meters below the surface at the Chibulum Copper Mine in Zambia’s copper belt region. REUTERS / Rogan Ward

Register now for FREE unlimited access to Reuters.com

JOHANNESBURG, May 8 (Reuters) – The need to secure new sources of metals for the energy transition amid sanctions against Russia’s largest producer has increased Africa’s risk appetite for large miners, who have few alternatives to the resource-rich continent.

Businesses and investors are considering projects they may have previously neglected, while governments are also looking to Africa, eager to ensure their countries can procure enough metals to support accelerated zero pressure.

Organizers say this year’s Investing in African Mining Indaba conference, held May 9-12 in Cape Town, will be attended by a top US government official in recent years, as well as representatives of the Japan Oil, Gas and Metals Corporation (JOGMEC). ), in the face of growing concerns of rich countries about security of supply.

Register now for FREE unlimited access to Reuters.com

“The reality is that the resources the world wants are usually in hard places,” said Steven Fox, executive president of New York-based political risk consulting firm Veracity Worldwide.

The U.S. administration wants to position itself as a strong advocate for battery metal projects in sub-Saharan Africa, he said.

“While Africa presents its challenges, those challenges are no more difficult than the corresponding set of challenges in Canada. It may be easier to implement a project in Africa than in a place like Canada or the United States,” he added.

The United States has expressed support for new domestic mines, but projects have stalled. The Rio Tinto (RIO.AX) Resolution copper project, for example, was halted due to Native American land claims and conservation issues.

Of course, the risks of mining in sub-Saharan Africa remain high. The acute security challenge facing mines in the gold-rich Sahel region was highlighted last month when Russia’s Nordgold left its Taparko gold mine in Burkina Faso due to a growing threat from militants.

Even in the continent’s most industrialized economy, South Africa, deteriorating rail infrastructure is forcing some coal producers to resort to transporting their products to ports. Read more

Yet, with 7% of global nickel supply in Russia, 10% of world platinum and 25-30% of world palladium not on the table, Africa’s rich deposits of these metals are starting to look much more attractive.

“As a mining company, there aren’t many opportunities and if you plan to grow, you’re going to have to look at riskier countries,” said George Cheveley, portfolio manager at Ninety One.

“It is clear that after Russia and Ukraine, people are more sensitive to geopolitical risk and you cannot predict which projects will succeed and which will not,” he added.

Kabanga Nickel, a project in Tanzania, secured funding from global miner BHP (BHP.AX) in January, and CEO Chris Showalter said he was recording increased demand from potential traders.

Western sanctions on Russia over its invasion of Ukraine are forcing metal supply chains to reconfigure along geopolitical lines, Showalter said.

“Not everyone will be able to get clean metals batteries from friendly jurisdictions, so I think some tough decisions will have to be made, and that will make people make new decisions about where they want to get them.”

Register now for FREE unlimited access to Reuters.com

Reporting by Helen Reid of Johannesburg and Clare Denine of London; Editors Amran Abocar and Susan Fenton

Our standards: Thomson Reuters’ principles of trust.

Leave a Comment