Modern Mining June 2021

Tycho Möncks, MD and partner at Boston Consulting Group, Johannesburg.

James Gilbertson, MD, SRK Exploration Services.

Wessel Badenhorst, partner – Hogan Lovells Johannesburg.

Zambia is home to substantial mineral deposits, in the form of copper and coal in particular. Rising demand for both products and a favourable invest- ment environment should drive growth exploration investment in the next few years. Zambia’s copper grades average around 2 – 3 % compared with a global average of approximately 0,8%, providing a boost to company profit margins, notes Business Monitor International. While South Africa has the most stable environ- ment in comparison to the rest of the region and has generally been one of the most trusted investment destinations in Africa over the past two decades, regulatory uncertainty persists following the Mineral Council’s legal challenge to the latest mining char- ter (Mining Charter III). Intermittent power supply remains a deterrent for investors. Priority commodities In terms of commodities attracting investment at the moment, Badenhorst says coal in South Africa

developed than other countries in the region, but the country’s extensive mineral reserves and rela- tively favourable investment climate make it one of the more attractive destinations in the region from an investment perspective. Angola’s key strength is that it has some of the largest untapped coal depos- its and significant iron ore deposits. The government is highly supportive of mining sector development, resulting in an improving investment climate and business environment. Elsewhere, Namibia’s mining industry remains underdeveloped compared with those of its regional peers. However, the country’s considerable reserves of uranium and diamonds bode well for the sector’s long-term growth. The country’s key strength is its relatively low political and operational risk when compared with its African counterparts. The legal system provides a good level of protection for for- eign investors. Namibia’s mining industry boasts significant opportunities and remains one of the most favour-

The lack of visibility and transparency with regards to ground exploration is hindering investment from early stage exploration companies and diversified miners.

able jurisdictions in the world, according to the Investment Attractiveness Index. Cilliers Mostert, director for consulting engineering firm, Knight Piésold Africa’s operations in Namibia, says despite the economic constraints across the globe, Namibia’s mining sector shows great promise, particularly as it remains the world’s largest producer of uranium oxide. Meanwhile, the Fraser Institute Annual survey of mining companies 2020 revealed that Botswana is the most attrac- tive jurisdiction in Africa in terms of both policy and mineral potential, and the most appealing to mining investments in Africa. In fact, Botswana is the highest-ranked jurisdiction in Africa on policy, ranking 15 th (of 77) in 2020, after ranking 22 nd (of 76) in 2019.

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