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Keep calm and invest in mining in Africa – expert

Feb 08 2017 12:30
Matthew le Cordeur

Cape Town – Cool heads and decisive leadership will ensure that mining investors who take the right risks in Africa will get satisfactory returns, an expert in the industry said on Wednesday.

While there are increasing regulatory hurdles to overcome for investors, there is still enough room to find rewarding projects in Africa, Baker McKenzie partner Kieran Whyte told Fin24 at the Mining Indaba in Cape Town.

Johannesburg-based Whyte focuses mostly on energy and infrastructure projects in Africa.

“The mining industry has been hit by labour issues, regulations, the commodity cycle and environmental and sustainability issues,” he said.

However, his advice to investors and companies wishing to enter the mining sector in Africa is to keep calm.

“Don’t be emotional,” he said. “Sit down and be rational. Weigh up the risks rationally and don’t get caught up in the rhetoric. You know what is core to your business, but be fully informed and do your own full assessment.”

Whyte said there has been more interest from investors at this year’s Mining Indaba than in 2016, but the focus is more on Africa than exclusively on South Africa.

'Enough reward for risks'

“I don’t think the industry is closed for business,” he explained. “There is enough reward for the risks in Africa.”

The creation of infrastructure corridors within Africa will assist in making the continent more accessible to investors and South Africa will play an important part in this, said Whyte.

“The corridors and associated infrastructure need to be collaborative and integrated,” he said. “There is a need for coordination and interdevelopment of infrastructure.

“The corridors will break down borders for economic reasons, but need to get built and financed.”

So far, political mistrust and sovereign stumbling blocks have prevented this, which is why all stakeholders need to get their houses in order.

“We need decisive leadership by all stakeholders in the industry,” he said. “We need to get our house in order.”

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