Global scramble for metals thrusts Africa into mining spotlight

div classBodysc17zpet90 cdBBJodivpBy Helen Reid and Clara Deninap

pJOHANNESBURG Reuters – The need to secure new sources of metals for the energy transition amid sanctions on top producer Russia has increased the Africa risk appetite for major miners, who have few alternatives to the resourcerich continent.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pCompanies and investors are considering projects they may have previously overlooked, while governments are also looking to Africa, anxious to ensure their countries can procure enough metals to feed an accelerating netzero push. p

pThis year‘s Investing in African Mining Indaba conference, which runs May 912 in Cape Town, will see the highestranking U.S. government official in years attending, organisers say, as well as representatives from the Japan Oil, Gas and Metals Corporation JOGMEC, in a sign of rich countries’ rising concern about securing supply.p

p“The reality is that the resources the world wants are typically located in difficult places,” said Steven Fox, executive chairman of New Yorkbased political risk consultancy Veracity Worldwide.p

pThe U.S. administration wants to position itself as a strong supporter of battery metals projects in subSaharan Africa, he said.p

p“While Africa presents its challenges, those challenges are no more difficult than the corresponding set of challenges in Canada. It may be easier to actually bring a project to fruition in Africa, than in a place like Canada or the U.S.,” he added.p

pThe United States has voiced support for new domestic mines, but projects have stalled. Rio Tintos Resolution copper project, for example, was halted over Native American claims on the land, and conservation issues. p

pCertainly, the risks of mining in subSaharan Africa remain high. The acute security challenge facing mines in the goldrich Sahel region was highlighted last month when Russias Nordgold abandoned its Taparko gold mine in Burkina Faso over an increasing threat from militants. p

pAnd even in the continents most industrialised economy, South Africa, deteriorating rail infrastructure is forcing some coal producers to resort to trucking their product to ports.p

pYet with Russia‘s 7 of global nickel supply, 10 of the world’s platinum, and 2530 of the world‘s palladium off the table, Africa’s rich deposits of those metals start looking a lot more attractive.p

p“As a mining company, there aren‘t many opportunities and if you are going to grow, you’re going to have to look at riskier countries,” said George Cheveley, portfolio manager at Ninety One.p

p“Clearly, after RussiaUkraine people are more sensitive to geopolitical risk and you cannot predict which projects are going to work out and which are not,” he added.p

pKabanga Nickel, a project in Tanzania, secured funding from global miner BHP in January, and CEO Chris Showalter said it is seeing increased demand from potential offtakers. p

pWestern sanctions on Russia over its invasion of Ukraine are forcing metals supply chains to reconfigure along geopolitical lines, Showalter said.p

p“Not everyones going to be able to get clean battery metals from a friendly jurisdiction, so I think some difficult decisions will have to be made, and it is going to force people to make some new decisions about where they want to source.”p

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pp Reporting by Helen Reid in Johannesburg and Clara Denina in London Editing by Amran Abocar and Susan Fentonp

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