Global Scramble For Metals Makes African Mines Attractive

The need to secure new sources of metals for the energy transition amid sanctions on top producer Russia has increased the Africa risk appetite for major miners, who have few alternatives to the resource-rich continent, Helen Reid and Clara Denina reported for Reuters.

Photo Insert: An open pit gold mine in Africa

Companies and investors are considering projects they may have previously overlooked, while governments are also looking to Africa, anxious to ensure their countries can procure enough metals to feed an accelerating net-zero push.

This year's Investing in African Mining Indaba conference, which runs May 9-12 in Cape Town, will see the highest-ranking US government official in years attending, organizers say, as well as representatives from the Japan Oil, Gas and Metals Corp. (JOGMEC), in a sign of rich countries' concern about securing supply.

"The reality is that the resources the world wants are typically located in difficult places," said Steven Fox, executive chairman of New York-based political risk consultancy Veracity Worldwide.

The US administration wants to position itself as a strong supporter of battery metals projects in sub-Saharan Africa, he said.

"While Africa presents its challenges, those challenges are no more difficult than the corresponding set of challenges in Canada. It may be easier to actually bring a project to fruition in Africa, than in a place like Canada or the US," he added.

The US has voiced support for new domestic mines, but projects have stalled. Rio Tinto's Resolution copper project was halted over Native American claims on the land, and conservation issues.

Certainly, the risks of mining in sub-Saharan Africa remain high. The acute security challenge facing mines in the gold-rich Sahel region was highlighted last month when Russia's Nordgold abandoned its Taparko gold mine in Burkina Faso over an increasing threat from militants.

And even in the continent's most industrialized economy, South Africa, deteriorating rail infrastructure is forcing some coal producers to resort to trucking their product to ports.

Yet, with Russia's 7% of global nickel supply, 10% of the world's platinum, and between 25% and 30% of the world's palladium off the table, Africa's rich deposits of those metals start looking a lot more attractive.

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