[miningmx] — LOOK up from the dire reports about strikes, regulatory uncertainty,
the leadership vacuum in SA and turn you attention to what’s happening north of our
borders. While the Farlam Commission sets about understanding the Marikana
atrocity, billions of dollars are flooding into Africa’s resources industry.
In the past week, Chinese company Sinchaun Hanlong said it had received
government blessing for a $1bn investment in Sundance Resources, a large iron ore
deposit in Cameron. Discovery Metals, meanwhile, an Australian company that owns
the Boseto copper project in Botswana, has attracted a $850m hostile bid from
China’s billionaire investor Yu Yong of CF Investments.
Investment in Mozambique’s coal and gas discoveries is now entering its tens of
billions of dollars, while Exxaro Resources recently passed up an opportunity to
investment in SA’s Soutpansberg coalfields, preferring instead its exposure to Central
African Republic’s iron ore industry – a commodity that is also turning the head of
Jindal Steel & Power.
The Indian powerhouse is thought to be formulating a $2bn bid for an unnamed West
African iron ore operation after having recently paid $114m for Toronto-listed CIC
Energy, which is developing a large coal deposit in Botswana.
The moral of the story is that Asia is pouring billions of dollars into Africa, whereas
it’s now becoming hard to name a new investment by a foreign company of any
significant size in SA. “There’s a lot of exploration work underway in Africa,’ says
Andrew Mitchell, a director of Bell Dewar, a local attorneys that earlier this week
unveiled a merger with Canadian company Fasken Martineau.
“The junior mining industry is an exciting place to be for a lawyer, especially if you
take a company through from formation to a listing. It’s nice work; very lucrative,’ he
says.
The attraction of Fasken Martineau to Bell Dewar is the fact that Africa is offering new
markets in mining and energy, especially in northern Mozambique and central Africa.
“SA represents a good base for the company; the network is here, but the interest is
in Africa,’ says Mitchell, who adds the merger with Fasken Martineau is effective
February 1.
– The article was first published in Finweek.
