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Tuesday 10 February, 2015 Issue 1
‘Challenging Times’ Greet Mining Indaba 2015
Tony Blair to Address Mining Indaba This Afternoon
By Lorraine Kearney
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portfolio managers, private equity managers, hedge funds, sovereign funds, merchant banks, analysts, and more.
ith more than 7,000 delegates attending the 21st Investing in African Mining Indaba, the world’s largest and most influential mining investment event, Managing Director Jonathan Moore welcomed delegates to the conference yesterday noting these are “challenging times.”
Among the attendees at Mining Indaba this year are senior representatives from more than 110 countries, among them key personnel from multi-national institutional investment firms, individual investors,
Continuing his role in public life, he now works to secure peace and prosperity in the Middle East, improve governance in Africa, encourage understanding of world faiths and boost access to sport for children in the North East of England.
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A Key Driver Following Moore’s official welcome, Cape Town Mayor Patricia de Lille spoke to delegates about the event and its impact on the Mother City, saying that in the past eight years Mining Indaba had injected R552 million into the City of Cape Town, mostly in accommodation and tourism activities.
Speaking on the opening day, Moore noted that Bloomberg tracking showed that commodities markets had fallen significantly in the past year. There was sluggish growth in China, and the European Union and U.S. were also under strain.
Africa Governance Initiative
Tony Blair Former Prime Minister United Kingdom
“The Mining Indaba is a key driver in placing Cape Town 140 x650mm as the events capital of Africa, and as such is benefiting (Continued on page 16)
ormer British Prime Minister Tony Blair will be the featured guest speaker today when Euromoney “Mr. Blair has vast experience as a global leader and through Institutional Investor Managing Director, Christopher the charity he founded in 2008, the Africa Governance Fordham, hosts a “Conversation with Tony Blair.” Initiative, he has worked with African governments to improve regulation and investment oversight,” Jonathan Blair was Prime Minister of Great Britain and Northern Moore, Mining Indaba Managing Director, said. Ireland from 1997 – 2007, having secured an historic third term in office. As leader of the Labour party, he led extensive public service reform, introduced a national minimum wage, oversaw constitutional reform, led the London 2012 Games bid and was instrumental in the Northern Ireland peace process. He also oversaw devolution in Scotland and Wales.
“As a result, Mr. Blair will provide unique and charismatic insights to our global delegation who are vested in capitalising African mining.” The former Prime Minister’s speech takes place at 12:25 this afternoon on the Main Stage.
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Investment Forum Focuses on Policy, Opportunity By Lorraine Kearney
Holmes spoke yesterday, the second day of the Investment Discovery Forum taking place alongside the Investing in African Mining Indaba programme. Themed “Beyond the obvious,” this year’s forum focused on untapped mining investment opportunities and the future of big mining in Africa.
Sudeshna Banejee, one of six of the World Bank report’s co-authors, opened the discussion by detailing some of its findings and their potential implications for the continent. The report estimates that by 2020, 650 million people will not have access to electricity in Africa. Mining operations obviously become more difficult in areas without sufficient energy infrastructure, as companies then have to find ways to meet their power needs themselves.
“In investing, the big thing is understanding demographics and understanding changes to growth: what are the policies that change or enhance growth?”
Dr. Kerfalla Yansane,’ the Guinean minister of mines and geology, underscored this fact when discussing the costs of gold mining in Guinea. “For companies to self-supply electricity [for mining operations], it costs 25 cents to produce one watt. But if [companies] use other options, it can cost as little as 5 cents.”
Cash Economy Growing In the US, everything was based on the 10-year bond. In Africa, the economy was based on cash, not policy. “The cash economy is going to grow more rapidly, and it makes much more opportunity going forward.”
Mining Indaba™ Daily News
Mounting input costs and inadequate electricity supply are two key constraints that could be resolved if the mining industry and African governments started working together, according to a report released by the World Bank last week.
Implications for the Continent
Conducting a SWOT analysis of Africa, Holmes pointed to political risk, noting that some African governments could be less than friendly towards mining.
(Continued on page 16)
By Robyn Kirk
“The Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa” was the topic of a special panel discussion Monday at the start of Investing in African Mining Indaba.
Investors are focusing increasingly on Africa, which has posted “epic” growth of 6%, according to Frank Holmes, CEO and chief investment officer of U.S. Global Investors Inc.
Forbes’ rich lists, Holmes said, were a marker for Africa’s growing economies. The continent’s 10 richest football players, for example, collectively brought in US$120 million a year; the rise of Nollywood was another positive statement about what was taking place in Africa.
Special Panel Unpacks ‘Power of the Mine’
Benefit of Mining Companies Fast-growing economies, infrastructure opportunities, untapped mineral wealth … delegates at the Discovery Investment Forum hear how Africa could be the investment game-changer of the next two decades provided it can stabilise its policies.
In turn, African countries can benefit from the presence of mining companies because they make creditworthy consumers, leading to increased generation of capital and the potential for further foreign investment. Richard Morgan, the head of government relations for Anglo American, expressed concern that the relationship
between governments and the private sector could be difficult, with electricity tending to become a political issue. Mark Bristow, chief executive officer of Randgold Resources, pointed to the essence of this conflict: “We [in business] worry about the next quarter; governments worry about the next election.” Anita George, another panellist and a senior director of the Energy and Extractive Global Practice of the World Bank Group, contended that while government-business conversations required expert facilitation, such problems could be resolved. “A good question is: How do we get all parties around the table? The World Bank could be integral to that.”
Focus: Ghana, Guinea and Zambia During the discussion part of the session, panellists answered questions posted online or submitted by the audience—many of them focusing in particular on Ghana, Guinea and Zambia.
Tony Image?
Nii Osah Mills, Ghana’s land and natural resources minister, said Ghana had achieved a degree of success in government-industry cooperation by encouraging privatisation by companies that could then provide electricity to the national grid. “I believe Ghana is a good example of what this report tries to point out.” Anglo’s Morgan expressed the hope that the conversation would continue in the mining world beyond the conference. “Firstly, we all need to go outside our envelope more than we have,” he said. “Secondly we need to realise that, with technology, there’s more than one way to do things.”
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