Mining and Exploration

From an investment perspective, are there particular global trends, the high level of demand for gold in the Middle East and Asia at present for example, that give you encouragement for future growth in Africa’s mining sector?
The thing about gold that you have to remember is that there is actually very little physical gold around the world today. That is why in India, for example, gold is currently trading for around $1,600 an ounce.

Of all the economies in Africa that are waking up to the resources they are blessed with, Tanzania stands out for several reasons. Not least among these must be its stability. Though it has never been a rich country, since independence in 1962 it has hardly ever been in the news. Turbulent decades have attracted the wrong type of attention to every one of Tanzania’s neighbours: cross-border conflict, inter-ethnic tension and population displacement have too frequently characterised the post colonial era.

The London-based oil exploration group, which focuses on Africa, doubled its estimate of its discovery in Kenya's South Lokichar basin, currently around 600 million barrels, following two successful well results. During the coming two years the company says it plans further exploration, predicting that the region could yield more than a billion barrels.

The rare stone was discovered at its Cullinan mine, 40 kilometres north-east of Pretoria, and represents one of the most exceptional stones recovered at Cullinan during Petra's operation of the mine. Indeed it isn’t the first of its kind, what with the company having also unearthed a 25.5 carat blue diamond in 2013, which went on to sell for $16.9 million. Understandably the company’s latest discovery is also expected to sell for a substantial price.

Building upon a pedigree and wealth of skills that stretch back decades, Exxaro Resources may be a relatively young business, but it has already solidified itself as one of South Africa’s largest diversified resources groups. Boasting interests in coal, mineral sands, ferrous and energy commodities, it is the country’s second largest coal producer with current production levels reaching 47 million tonnes per annum (mtpa).

It is no exaggeration to say that the future of African economic development, in the near to mid term at least, is inextricably linked with its mineral resources. It is these that will provide the capital that can be re-invested in building a sustainable business infrastructure whether in manufacturing, services or technology and innovation.

Rio Tinto is the first of the big diversified miners to report its annual production figures for 2013, which showed strong growth despite industry concerns of weakening Chinese demand for steel.

The Anglo-Australian mining giant produced 70.4 million tonnes of iron ore in the fourth quarter, a six percent increase on the same period in 2012. It comes at the same time that the company implements a series of cost cuts that has seen it reduce exploration costs alone by $1 billion.

In the present climate exploration companies are really struggling to secure investment to complete drilling programmes and progress to a defined resource they can either sell on or start to develop. But companies that have already moved into production and can point to reliable cash flow are in an enviable position.

Though its mining history may span close to 500 years and counting, Mexico remains a major mineral exploration ground and retains its position amongst the world’s largest metal producers. The country’s rich geology and favourable regulations has made it an epicentre for mining activity, not least it is mountainous northern region, home to the legendary Sierra Madre gold and silver belt. It is here, 220 kilometres west of Chihuahua, where one finds the Pinos Altos mine.