African Business 2020 edition

OVERVIEW
Mining
The global economy is demanding new minerals, and Africa has them.
Sector Insight
Africa’s first lithium-ion
factory has been launched.
Africa features prominently on most lists of global mineral
resources. One Botswana diamond mine produces about
quarter of the world’s annual diamond supply by value
and the continent has recently moved close to 75% of
global production of diamonds. Mining and quarrying is the largest
contributor to GDP in Africa.
The richness of Africa’s mineral resource is extraordinary. In
several categories, Africa is either the global leader or it has the
second-biggest reserve. These include cobalt, phosphate rocks,
bauxite, industrial diamonds, platinum-group metals (PGMs),
zirconium and vermiculite.
Iron ore, copper, nickel, zinc, uranium, manganese, vanadium,
ilmenite and gold, the continent’s biggest resource, are also found in
large quantities.
The mining sector is responsible for 90% of the exports of the
Democratic Republic of Congo (DRC) and the figure is about 80% for
countries such as Botswana (which has gold, nickel, copper and soda
ash in addition to its rich diamond resource), Guinea (gold, diamonds,
alumina and bauxite), Senegal (phosphate and diamonds) and Sierra
Leone (diamonds).
Ghana exported gold to the
value of $8.3-billion in 2017,
which was just less than half
of the total value of exports,
including crude petroleum.
South Africa’s top three exports
(out of a total of $108-billion)
were gold ($16.9-billion),
diamonds ($9.8-billion) and
platinum ($9-billion) (OEC).
Foreign interest in African
mining is intense. Chinese
companies are active in every
part of the continent, including
Ghana, in support of bauxite
exploration and Zambia, as a
partner in copper companies.
More than 150 Australian
companies operate in Africa
and Japan is active through
the Japan Oil, Gas and Metals
National Corporation (JOGMEC)
and several other companies
such as Toyota Tshusho Corp,
which is a minority partner in a
Moroccan tin project.
The merger of Randgold
and Barrack in 2018 created
a gold mining company with
a market capitalisation of
$19.4-billion. The new company
is likely to increase its activity in
West Africa where Gold Fields
Ltd, Newmont Mining Company
and AngloGold Ashanti have
operations.
Reliance on a single
mineral creates an exposure
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