Africa Practice’s Chimboza weighs up investment potential in East Africa's mining sector

Africa's mining sector holds vast potential for economic growth and development, with the continent being richly endowed with natural resources. The region boasts significant opportunities within the mining industry, particularly in West Africa, where countries like Ghana have emerged as key players in gold production. According to Rishon Chimboza, Head of Extractive Industries at Africa Practice, the geology of the continent plays a fundamental role in attracting investors. However, it is not just the geology that matters; other factors such as government receptiveness, legislation, regulation, policies, infrastructure, and access to markets are crucial in driving investment in the sector. The focus on value addition and beneficiation is becoming increasingly important in the mining industry, with a shift towards adding value to battery minerals and other raw materials. As countries explore ways to enhance their mining industries, the importance of cooperation between nations in the region has become a key consideration. Inadequate geological data and the need for collaboration in the region are highlighted as areas that require attention to fully unlock the potential of Africa's mining sector. The interest in Africa's mining sector, particularly in West Africa, has been growing steadily, with countries like Ghana leading the way in gold production. In 2021, Ghana surpassed Africa as the largest gold producer, attracting a significant portion of the global exploration budget. The abundance of gold in the region continues to draw investor interest, making it a focal point for mining activities. Additionally, there is a rising focus on battery minerals, driven by the increasing demand for electric vehicles. Companies, like TechMets, are exploring opportunities to add value to these battery minerals, challenging established players in the field. The emphasis on value addition and beneficiation presents a promising avenue for African countries to capitalize on their mineral resources and attract high-quality investors. The establishment of facilities for value addition and processing of minerals is crucial for African countries to compete globally and retain more value within their borders. Setting up smelting and refinery facilities requires collaboration and coordination between countries to leverage economies of scale and maximize the benefits of mineral processing. By working together to establish strategic locations for processing facilities, countries can create a more conducive environment for investors and enhance the value chain within the mining sector. Regional cooperation plays a significant role in ensuring that countries in the region optimize their resources and create a sustainable mining ecosystem that benefits all stakeholders. The need for improved geological data and collaboration in the region is paramount to attract the right investors and drive sustainable growth in the mining sector. With only a few African countries equipped to conduct complex geological surveys, there is a critical gap in quality geodata across the continent. By sharing data and working together on geological surveys, countries can gain a better understanding of their mineral resources and attract targeted investments. The forthcoming Pan-African continental free trade area presents an opportunity for countries to adopt a more collaborative approach towards developing the mining sector. By enhancing cooperation and information sharing, African nations can create a more integrated and efficient mining ecosystem that maximizes the potential of the region's natural resources.