Africa 2023: The year of
mining sector opportunities


Shirley Webber

Managing Principal:
Coverage Head, Resources and Energy


As a leading funder of resource and mining projects on the African continent, we are excited by the confluence of opportunities that 2023 will present.

Research out of the African Natural Resources Center - a non-lending arm of the African Development Bank (AdDB) – highlights the significance of the sector for the continent.  The organisation estimates that Africa’s extractive resources could contribute over $30bn per annum in government revenue for the next 20 years and that revenues from recent hydrocarbon and mineral discoveries could contribute between 9% and 31% of additional government revenues over the first ten years of production for countries such as Ghana, Liberia, Mozambique, Sierra Leone, Tanzania and Uganda.

On top of this, there is much talk about a new super-cycle in metals and minerals that are focused on the decarbonisation trend. Metals such as lithium, nickel, graphite and cobalt are sharply in focus at the moment and abundant on the African continent. These are game-changing economic contributions for African countries and will assist in driving development, but it is important that we create an enabling environment that allows this potential to be realised. For that reason, we should look at some of the key lessons from South Africa to provide a framework in which we can maximise these opportunities.

Minerals account for more than half of South African export revenue – primarily driven by precious metals. However a look at the World Bank Container Port Performance report which ranks 370 port operations around the world, the bottom 15 include Kribi Deepwater (Cameroon), Nouakchott (Mauritania), Lagos (Nigeria), Abidjan (Ivory Coast), Dar Es Salaam (Tanzania), Pointe Noire (Congo), Ngqura, Durban and Cape Town (South Africa) and Luanda (Angola). As a frontier market, it is perhaps not surprising that African countries are found at the tail-end of these kinds of ranking however the economic multiplier effect of getting these ports working cannot be emphasised enough.

The South African government has recognised the importance of optimising our port operations and has committed to significant upgrades including those in Mossel Bay, Saldanha and Cape Town and this is being augmented by some public-private-partnerships aimed at bringing infrastructure on line quicker.

The next consideration is access to energy, transport and water infrastructure and this is where bold leadership is going to be required over the next decade from both public and private sector stakeholders. PwC estimates that government has to commit to R1,6 trillion in public sector infrastructure spend by 2030 to get our fixed capital to Gross Domestic Product (GDP) ratio to around 30% and this needs to be augmented by the private sector committing twice this. These are significant investments and have the potential to unlock huge value for the economy but as we have seen in the South African energy infrastructure space – we have no time for indecision.

Lastly, there needs to be a commitment to integrated economic activities that benefit stakeholders through the entire mining value chain. Concepts such as Enterprise and Supplier Development (ESD), Social Labour Plans (SLPs), Environment, Social and Governance (ESG) and the UN Sustainable Development Goals (SDGs) are all part of an enhanced focus on sustainability, but all require participants to display higher levels of leadership and longer-term thinking. We believe that our ESG-focused transaction with Harmony is a perfect example of how businesses will reimagine their financial transactions in the coming years as they find ways to reduce the cost of doing business, while ensuring that all participants in the value-chain are able to benefit from extractive mining activities.  Captive renewable power initiatives linked to mining activities in Africa are growing at a considerable pace, emphasizing the need for reliable power sources to assist economic growth. 2023 represents an exciting new opportunity for mining and resources on the continent and we believe the sector is entering an exciting new phase. It will take a coordinated effort, but the future is bright if all stakeholders are aligned in terms of goals, energy security  and outcomes.

Shirley Webber

Managing Principal: Coverage Head, Resources and Energy

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