African mining has come a long way from the ‘blood diamonds’- image and it may take some time to amend the past perceptions of African mining. Mining companies are busy expanding in Africa and mining remains one of Africa’s fastest growing sectors with a considerable contribution to national GDPs.
When you think of doing business in the mining sector, again the opportunities reach far beyond exploration and extracting raw material out of the ground. Instead, you may think about logistics, equipment, export and trade, recruitment, mining conference management, investment, or value addition in the respective countries.
TIP: By the way, the issue of value addition is of growing importance in Africa, and both a development and industry trend into which you can tap in. Just in March 2014, Uganda banned any export of iron ore in an attempt to boost value addition, and Botswana is now cooperating with a Swiss company to start cutting and polishing diamonds inside Botswana, which means it can be sold as a much higher price and more money stays in the country. That’s what value addition is all about. It’s hugely important for Africa’s development and part of the agenda of several African governments across various sectors. The value addition in agriculture for example. So if you think of a African business that adds value to a product before export, you are onto a winning strategy on many levels contributing to a better future in Africa, too.
What ever your plans are in the mining sector, the annual report by the Frazer Institute provides great guidance to your mining plans and the institute has just recently published its latest issue. It is basically summarising the results of information given by those who are already well established in the world’s mining industry. And the ranking of the two top countries for Africa are a result of confidence the mining companies operating on the continent already have into these locations for mining investment.
They are:
Botswana and Namibia
Namibia bettered its global position from 45th (2012) to 30th (2013) out of 96 jurisdictions.
Botswana took the 25th position in world rankings in 2013. This means it slipped from its previous ranking but it remains the top mining destination for Africa.
Botswana has been known for being the world’s top diamond producer after Congo (but the first place is now apparently taken by Russia!). The country’s largest diamond mining company is 50% owned by the government. The mining industry provides 40% of the country’s revenue and accounts for 20% of the global diamond supply. Although there are still said to be ample opportunities in Botswana’s diamond industry, the government tries to diversify its mining production and promotes other resources. One of them is coal.
Sorry…., diamonds or coal? What a jump. And the winner is……the diamond.
Namibia’s mining sector is growing at a fast rate and according to the Chamber of Mines contributed 11.5% to the country’s GDP in 2012, up from 8.3% in 2011. Namibia, too, is a world class producers of rough diamonds, but also produces uranium oxide, zinc, fluorspar, gold, copper, and cement.
So why have mining companies great confidence into these two countries? Enabling regulations in the industry are most probably the key factor. But there is one factor that strikes me, and that is that the two countries belong to Africa’s safest and most secure.
And leaving you with a quote by a contributor at Forbes in an article he wrote at the end of last year: “Diamonds might be a girl’s best friend but from next year they could also be an investor’s best friend thanks to a global decline in the production of quality gems from mines in Russia and Canada, and rising demand, particularly in China.”
So there is a gap in the world market and Africa has quality when it comes to diamonds. Good to know.
A business or investment in African mining and precious gems is one to consider.
Note: The Government of Namibia announced on May 27, 2014, that it will now draw legislation for ‘strategic mines’. These are mines that would only be explored and mined by the state. Uranium, copper, gold, zinc, coal, all and diamonds will under that category. More details: Click here.
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