Objective Capital's Africa Resources Investment Congress 2012
Ironmongers' Hall, City of London
12 June 2012
Speaker: Ed Coughlan, Business Monitor International
African mining: a macroeconomic and political analysis
1. AFRICA RESOURCES
INVESTMENT CONGRESS
African mining: a macroeconomic and political analysis
Ed Coughlan – Commodities Analyst,
Business Monitor International
IRONMONGERS’ HALL, CITY OF LONDON TUESDAY, 12 JUNE 2012
www.ObjectiveCapitalConferences.com
2. West African Mining: A Macroeconomic &
Political Analysis
Business Monitor International
Edward Coughlan, Commodities Analyst
12 June 2012, London
Commodities Research
3. Presentation Agenda
1. Introduction To Business Monitor International
2. West Africa’s Mineral Reserves
3. Why Now?
4. Macroeconomic Implications
5. Risks
6. Key Takeouts
7. Q&A
Commodities Research
4. 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 historical
expertise in Emerging Markets
• Clients in over 140 countries worldwide including more than 400 of
the Fortune 500
• A unique analytical approach of Total Analysis, Investor Focus and
Wide-Ranging Systematic Coverage gives us unparalleled expertise in
producing opportunity and risk analysis for our clients
Commodities Research
5. 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
6. West Africa To Drive Output Growth
Iron Ore Production (mntpa)
Commodities Research
9. West Africa To Erode South Africa’s Dominance
Africa - Gold Output (% Share)
Commodities Research
10. 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
11. Prices To Remain Elevated
Metal Prices Rebased
Commodities Research
12. West Africa Shows Greatest Improvement
Africa – Regional Business Environment Ratings (Out Of 100)
Commodities Research
13. 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
14. Mining Boom To Result In Rapid Growth
Average Real GDP Growth Rate (% Chg y-o-y, 2011-2016)
Commodities Research
15. 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
17. 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
18. 10. Q&A
Business Monitor International
ecoughlan@businessmonitor.com
Commodities Research