Strategic Metals Shine in Africa

By: Anthony_David

South Africa has over 80% of the world’s manganese resources and it accounts for about 15% of the global production each year. Statistics South Africa (Stats SA) reported that March 2010 saw the nation’s mining industry record the highest growth since March 2004. While the total mining industry recorded a year-on-year growth of 11% in March, manganese ore production grew by 55.3%. Diamond production rose by 98.4%.

However, gold and copper saw a decline in production. A chronic power deficit and the need to close down certain mines for safety reasons in 2008 have reportedly been reflected in the lower production. Economist Kgotso Radira of Investec said that high numbers of the first quarter were supported by the global inventory buildup. He commented, “Mining production outlook for South Africa remains positive with commodity prices rising, but rand strength remains a major risk for growth in the country.”

Zambia has enormous reserves of copper-cobalt ore, manganese, nickel, lead-zinc, iron ore, gold and uranium. The government has, over the years, implemented many policies and introduced many incentives to attract both domestic and foreign investment in the sector. On that note, Australia’s Ethan Minerals Limited (ASX:ETH) recently signed a joint venture agreement with Eagle Eye Mining Zambia Limited to develop manganese prospects in Zambia. The first prospect to be explored in the Mkushi district includes five known prospects covering 77 square kilometers.

Gabon is the second largest producer of manganese in the world and 95% of its production is utilized by the global steel industry. Ogooue Mining Company Division (COMILOG), a subsidiary of French miner Eramet SA (EPA:ERA), has been operating the Gabon’s Moanda manganese mine since 1962. The Gabon government has reportedly expressed an interest in acquiring a stake of 10% to 15% in Eramet SA. African nations are increasingly keen to reclaim their mineral wealth from foreign companies. The South African government has, in fact, imposed regulations that ensure increased domestic ownership on mining ventures.

Susan Shabangu, South Africa’s Mineral Resources Minister, announced recently that the nation’s new mineral beneficiation strategy would soon be presented to the Cabinet for approval. The strategy is aimed at processing the nation’s ores in domestic facilities instead of continuing to export the ores, and thereby leverage long-term benefits from the nation’s natural resources. Shabangu said that there were future possibilities of mining magnesium and rare earth metals in South Africa.

By Anthony David

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