The crucial role of infrastructure investment in unlocking the continent's mining potential came under the spotlight on the first day of the Investing in African Mining Indaba that started in Cape Town on Monday.
South Africa’s minister of mineral resources and energy, Gwede Mantashe, acknowledged that mining in South Africa had been severely constrained in 2023 due to the lack of energy and logistics bottlenecks.
“As South Africa hosts this conference under the theme ‘Embracing the power of positive disruption – a bold new future for mining’, we must admit that 2023 was a tough year for African mining due to a myriad of international and national challenges,” he said. “Some of the factors that impacted the sector include high energy prices, high inflation and lower commodity prices.”
Turning to local shores, he said this, coupled with load-shedding and the pressure on the rail and port system, had placed severe pressure on mining houses’ operational costs, resulting in the sector only being able to make the “bare minimum contribution to the economy”.
He said considering the importance of mining on the continent and the role it played in economic growth, ongoing investment in infrastructure to ensure the smooth movement of bulk commodities to ports, preferably via rail, was critical.
This was reiterated by Zambian President Hakainde Hichilema, who said that ongoing efforts were being made by the Zambian government to improve the movement of mining commodities from the landlocked country to the various ports. He highlighted, in particular, the development of the Lobito-Zambia railway line, saying similar investments would be made to the east as well.
Frans Baleni, chair of the executive advisory board of the Indaba, told delegates that infrastructure investment was critical for countries wanting to strengthen their mining sector. “As we position the mining industry in Africa, we need to acknowledge that we need to invest significantly in infrastructure to grow the sector and to realise the opportunities it presents to our countries for growth. We require large amounts of foreign capital to build the mining sector. The continent must strive for political stability and create investor-friendly environments for investors.”
Delivering the keynote address, President Cyril Ramaphosa highlighted the critical role of mining in creating jobs and driving exports, not only in South Africa but across the continent.
“In South Africa, we are dealing with the energy crisis and the port and rail crisis causing bottlenecks and putting serious pressure on miners' operational costs. Added to that is the challenge of illicit mining, infrastructure vandalism and it puts strain on mining output and returns. We are aware of this and committed to working together with key role players in the industry to overcome these challenges, and a number of initiatives are under way to address this.”
He said a secure supply of electricity was critical for South Africa’s mining sector, as was a smooth supply chain.
