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["mining","africa","russia"]

Further attention shifts to African mines amid Ukraine-Russia war and global green energy push

As the top producer of precious metals, Russia previously exported around 40% of the metals in the world. However, after Western sanctions piled onto the country, the spotlight has shifted to Africa, the second-largest producer in the world. Combined, these two regions produce around 80% of the world’s metals.

Governments are turning to resource-rich Africa, anxious to ensure that their countries can acquire enough metals to feed a quickening net-zero and green energy push.

According to organizers, this year’s Investing in African Mining Indaba conference, which was held earlier this month in Cape Town, saw the most amount of highest-ranking US government officials in years. The conference also welcomed Japan Oil, Gas and Metals Corporation (JOGMEC) representatives, demonstrating wealthier countries' rising concerns about securing metals supply.

Speaking at the event, Tom Quinn, the head of content for Mining Indaba, explained that the sanctions on Russian coal, diamonds and lithium, it presented “opportunities for Africa,” but by the same token, the record-high inflation witnessed worldwide affects the nation’s debt. 

"The reality is that the resources the world wants are typically located in difficult places," said Steven Fox, the executive chairman of New York-based political risk consultancy Veracity Worldwide, at the event.  

Fox also added that the US administration wants to position itself as a strong supporter of battery metals projects in sub-Saharan Africa. 

"While Africa presents its challenges, those challenges are no more difficult than the corresponding set of challenges in Canada. It may be easier to actually bring a project to fruition in Africa, than in a place like Canada or the US," he commented.

Echoing this, mining analyst Peter Major said that the unfortunate circumstances in Ukraine are positioning pushing South Africa’s precious metals market to the forefront of the industry. “[South Africa] produces half of the world’s palladium and we produce 75% of the world’s platinum and we produce about 90% of the world’s rhodium. Because the world is restricting the platinum and palladium they get from Russia, it’s squeezing the price up so we’re in a great position.” 

Major also added that this increased demand applied to coal as well. 

Still, there are high risks in mining in sub-Saharan Africa. Last month, Russia’s Nordgold abandoned its Taparko gold mine in Burkina Faso in the gold-rich Sahel region due to security challenges, as they faced increasing threats from militants. 

But since Russia’s 7% of the global nickel supply, 10% of the platinum, and 25-30% of the palladium of the market, Africa's rich deposits of those metals appear a lot more attractive despite the risks involved.

"As a mining company, there aren't many opportunities and if you are going to grow, you're going to have to look at riskier countries," said George Cheveley, portfolio manager at Ninety One. "Clearly, after Russia-Ukraine people are more sensitive to geopolitical risk and you cannot predict which projects are going to work out and which are not," Cheveley added.

The CEO of Kabanga Nickel, Chris Showalter, also added that "not everyone's going to be able to get clean battery metals from a friendly jurisdiction, so I think some difficult decisions will have to be made, and it is going to force people to make some new decisions about where they want to source."

 

Majestic Corporation has been a leading precious metals recyclers, non-ferrous metals and Catalytic converter provider for around three decades. With a presence in the United States, United Kingdom, Malaysia, Italy, Mexico, Australia, Hong Kong and more, as well as a network of precious metals refineries around the world, we work with major customers and partners in a transparent and discrete manner and only offer the highest quality services at competitive prices. 

 

Contact us here for more information. For media inquiries, please contact kl@pklstudios.com



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