African mining: a macroeconomic and political analysis
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African mining: a macroeconomic and political analysis



Objective Capital's Africa Resources Investment Congress 2012

Objective Capital's Africa Resources Investment Congress 2012
Ironmongers' Hall, City of London
12 June 2012
Speaker: Ed Coughlan, Business Monitor International



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African mining: a macroeconomic and political analysis African mining: a macroeconomic and political analysis Presentation Transcript

  • AFRICA RESOURCESINVESTMENT CONGRESS African mining: a macroeconomic and political analysis Ed Coughlan – Commodities Analyst, Business Monitor International IRONMONGERS’ HALL, CITY OF LONDON TUESDAY, 12 JUNE 2012
  • West African Mining: A Macroeconomic & Political Analysis Business Monitor International Edward Coughlan, Commodities Analyst 12 June 2012, London Commodities Research
  • Presentation Agenda1. Introduction To Business Monitor International2. West Africa’s Mineral Reserves3. Why Now?4. Macroeconomic Implications5. Risks6. Key Takeouts7. Q&A Commodities Research
  • 1. Introduction To BMI• Market Intelligence provider producing analysis on Industry Risk,Country Risk, Commodities, Financial Markets and Companies• Covering 175 countries and 22 industry verticals with a historicalexpertise in Emerging Markets• Clients in over 140 countries worldwide including more than 400 ofthe Fortune 500• A unique analytical approach of Total Analysis, Investor Focus andWide-Ranging Systematic Coverage gives us unparalleled expertise inproducing opportunity and risk analysis for our clients Commodities Research
  • 2. West Africa’s Mineral Reserves• We expect the region to gain greater global importance• Gold & iron ore will be the main growth areas• Substantial reserves of copper, uranium and nickel• China’s interest in the region to continue growing Commodities Research
  • West Africa To Drive Output Growth Iron Ore Production (mntpa) Commodities Research
  • Africa’s Importance To Rise Global – Iron Ore Output (% Share) Commodities Research
  • Chinese Investment To Pour Into Africa Commodities Research
  • West Africa To Erode South Africa’s Dominance Africa - Gold Output (% Share) Commodities Research
  • 3. Why Now?• Elevated metal prices by historical standards• Falling grades and rising costs elsewhere• Marked improvements in political risk• Countries are eager to attract investment Commodities Research
  • Prices To Remain Elevated Metal Prices Rebased Commodities Research
  • West Africa Shows Greatest Improvement Africa – Regional Business Environment Ratings (Out Of 100) Commodities Research
  • 4. Macroeconomic Implications• Mining to drive West Africa’s rapid growth in GDP• Substantial inflows of Foreign Direct Investment• Positive impact on infrastructure Commodities Research
  • Mining Boom To Result In Rapid Growth Average Real GDP Growth Rate (% Chg y-o-y, 2011-2016) Commodities Research
  • 5. Risks• Political stability remains the key risk• Governments may seek to capitalise on populist support• Greater resource nationalism likely• A sharp decline in metal prices would affect capital expenditure Commodities Research
  • Capex At Risk Commodities Research
  • 6. Key Takeouts• We are very optimistic regarding West Africa’s mining sector• Mining will have a substantial impact on GDP & FDI• Large untapped reserves in a range of metals will continue to attract investment, particularly from China.Key Risks• Significant decline in metal prices• Infrastructure deficit• Uptick in political risk Commodities Research
  • 10. Q&A Business Monitor Commodities Research