‘Investors need reassurance on return on investment’

Africa needs to improve mining legislation to provide certainty to investors that they will be able to recover their initial investment costs plus profit. That’s according to Wonder Nyanjowa, Frost & Sullivan mining analyst, who says some African countries like Zimbabwe have not fully benefited from their natural resources because of the lack of clear mining laws. As one of the key drivers of Africa’s growth, mining should be playing an increasingly important role on the continent, he says. “Mining is an important industry for Africa not just in terms of economic growth but also as a creator of much-needed employment and to enhance the standing of the continent in the world,” says Nyanjowa. “The bulk of the world’s platinum, diamonds and ferrochrome is produced in Africa. South Africa has long been considered the global centre of mining excellence.” And this should be used to the advantage of the continent, says Nyanjowa. “Mining methods have been mechanised whilst supporting industries are sufficiently developed to meet the needs of the growing mining industry.” In South Africa mining contributes some 8% of the country’s GDP – a contribution that rises to 17% if the multiplier effects of mining in downstream industries are considered. “Mining constitutes 15% of the supply and demand for energy in South Africa while about 96% of the country’s electricity is generated from coal,” says Nyanjowa. “The bulk of Zambia’s export receipts are from copper while Angola, Nigeria and Gabon’s economies are driven by oil. There is possibility and opportunity in African mining.” According to Nyanjowa coal is currently the most significant attraction in South Africa given the expansion programmes at Eskom and Sasol.