News Column

Mapping Africa's hidden wealth

February 6, 2014

The World Bank wants to launch a $1 billion (R11.1bn) fund in July to map the mineral resources of Africa , using satellites and airborne surveys to fill geological gaps across the continent where a lack of adequate data hampers mining investments. The World Bank has committed $200 million to the five-year fund, and was meeting with mining companies and governments from sub-Saharan Africa who have expressed interest, a senior bank official said yesterday. "Times are tough, so the mining companies are counting their pennies, but there is a lot of interest because it is exactly when commodity prices are low and the companies are reducing their investment budgets that having the information to guide their priorities is valuable," said Paulo de Sa , senior manager at the World Bank's mining unit. De Sa met 10 mining companies on the sidelines of the Mining Indaba at the Cape Town International Convention Centre , including Rio Tinto and Ivanhoe Mines , who were interested in the fund. Initially targeting southern and eastern Africa , De Sa said the fund would aim to collate existing data on to a single, digital platform that would be accessible to the public. Besides helping to guide exploration investment, African governments could benefit by being able to negotiate better deals when handing concessions to mining companies, he said. "If they know what they have in their territory, they are in a better position to fine-tune and calibrate the fiscal regime and mining laws," De Sa said. When Mozambique , for example, privatised its giant Moatize coal mine, it did not know the true potential of the coal basin until Brazilian miner Vale started exploration work. De Sa said the bank, which has received expressions of interest from Malawi and Mozambique to assist with geological mapping, hoped to identify copper prospectivity in Zambia , Africa's top producer of the metal. "There is a lot more copper in Zambia than what is known, so we hope to identify the areas with more prospectivity and then the government will be able to attract more investment to areas because they know there will be a lot more certainty, a lot less risk," he said. The data could also be used by governments when planning infrastructure development or water resource allocations. De Sa said the mapping fund hoped to find up to $1 trillion worth of new mineral resources on the continent. Meanwhile, Chamber of Mines chief executive Bheki Sibiya said at the indaba that power supply and productivity rather than labour laws and unrest worry foreign investors looking to sink funds into South Africa's mining sector. Other concerns include operational challenges, the local skills shortage, rail infrastructure, and, to a lesser extent, continuing "rumblings" about the nationalisation of mines, Sibiya said. He rejected reports that the South African mining environment appeared gloomy to would-be investors. "I would say cautious rather than gloomy. Cautious in that they are saying: 'There are issues that present themselves as impediments. We hear you saying you are determined, able and willing to fix these things. Please convert your will into practical programmes.'" Once this happened, investments would start flowing into the sector. The Mining Indaba ends today. Billed as the world's biggest mining investment event, it has attracted close to 8 000 delegates from 2 100 international companies. - Reuters and Sapa Cape Argus

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Source: Cape Argus (South Africa)

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