The State of mining in Africa

Striking a balance

The State of Mining in Africa - Striking a balance, is a consolidated point of view of the Deloitte mining leaders across Africa backed by research. We have taken a snapshot view of several mining regions across Africa and share some of what is happening with regard to policy and infrastructure.

State of Mining in Africa

Mining companies around the world are looking for growth opportunities and Africa, with its wealth of minerals, has become a choice for many with over 1,800 mining projects in various stages of development or operation. Miners, investors and governments strive to overcome a host of challenges to become successful in their endeavours. The objective of this paper is to take stock of the key themes which are surfacing across the continent.

In mining, when we consider what success looks like, it is our experience that five key factors set any mining project or operation up for a successful outcome. 

These are:

  • A good mineral deposit
  • The deposit is located in an economic region with good governance and consistent application of civil and tax law
  • Infrastructure in the form of roads, rail, ports, electricity and communications to support the mine should be available and functioning
  • A well understood inbound and outbound supply chain supporting the mine and points to market
  • A competent and cohesive team which safely works together

Mining developments, whether greenfield or brownfield, are not easy and require discerning investors and mining executives to overcome unique barriers that prevent the above five key factors from becoming a constant within the mining project or operation.

Looking at the current mining investment, development and production environment in Africa against these factors, Deloitte’s research shows two main factors continue to have lingering barriers which lead the less agile and adventurous investors away from the continent. These are governance and infrastructure.

We believe what is driving this is governments of resource rich countries across the continent are seeking to strike the balance of delivering the value of the mineral back to its people, while at the same time, create an operating environment that is attractive to investors and thus setting the country up for further growth. Getting policy set right in a dynamic political and economic environment where commodity prices are on the move is proving to be a tricky balancing act.

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