May 17, 2020

Africa’s mining markets show momentum for investors

mining investments
African mining
african investme
3 min
Jean-Claude Bastos de Morais, Founder and Chairman of the Advisory Board, Quantum Global Group - an investment firm that focuses on Africa
By Jean-Claude Bastos de Morais, Founder and Chairman of the Advisory Board, Quantum Global Group

It seems almost as if there are two parallel economi...

By Jean-Claude Bastos de Morais, Founder and Chairman of the Advisory Board, Quantum Global Group

It seems almost as if there are two parallel economic worlds right now. In the developed economies, commentators and policymakers are bouncing from one moment of turbulence to another (the latest being Brexit) – whilst Africa undergoes structural, industrial and economic change. Africa’s policymakers and regional bodies have moved quickly to find new funding avenues to support industrial growth and drive socio-economic change.

Despite the enormous impact of the collapse of oil and metal prices, industrial growth and economic diversification are coming from perhaps an unexpected quarter: mining. The evidence for optimism in the sector is plain to see.

Firstly, we must remember that African investment is heavily developmental – so despite what is happening farther afield, the job of nation building must continue. But development needs to be smart: value for money with the promise of low-risk medium-to-long-term returns. And of course, metal prices are at an all-time low, presenting an opportunity to buy at the bottom of the valuation cycle.

 This is why Africa’s mining industry is gaining momentum – perhaps counterintuitively - presenting investors with superb opportunities. China is the world’s largest importer of metals and the country’s relative slowdown is obviously still a cause for concern (in 2015 China experienced the lowest GDP growth since 1994).

However, smart structural and funding models being adopted in some African countries – and the support of industry bodies – is paving the way for much more lucrative opportunities in the mining sector.

The mining industry in Africa now benefits from a greater level of regulatory oversight. Regulatory changes help to achieve greater levels of productivity and efficiency for investors, particularly in areas such as labour law: strikes can be avoided and employees can become better motivated through the provision of skills training and global standards of health and safety legislation.

In 2009, the African Union Commission (AUC) adopted a treaty that encourages cooperation between the public and private sectors. It also created the Africa Mining Vision (AMV), which sets out, ‘Africa’s own response to tackling the paradox of great mineral wealth existing side by side with pervasive poverty.’ AMV believes that mining companies and governments have a duty to work together in the collective national interest, to ensure that the industry actually contributes to local socio-economic development through skilled training, environmental protection and fair contract negotiations with multi-nationals. It means integrating mining into industrial and trade policy.

Integration means that African mining can contribute to multiplier industries – moving away from being an exporter of raw materials to a region that manufactures metals and creates knowledge-based services. This is smart government that protects the interests of African communities and contributes to economic diversification.

Look out for part two of this feature on Monday!

The November issue of Mining Global Magazine is live!

Follow @MiningGlobal

Get in touch with our editor Dale Benton at [email protected]

Share article

Jun 29, 2021

Vale invests $150mn to extend life of Manitoba operations

battery metals
2 min
Vale’s $150mn investment in operations at Thompson, Manitoba will extend mine life by 10 years

Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.

Global energy transition is boosting the market for nickel

The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.

“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.

“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”

Vale continues drilling program at Manitoba

Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.

“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.

“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”

The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history.  Mining of the Thompson orebody began in 1961.

“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.

Share article