Exploration Bonanza Here to Stay
Ross, Priscilla, African Business
Gold exploration budgets have been spiraling upwards since the 1990s and this year they hit an alltime high of $2.5bn. A good segment of this is destined for Africa. If the continent's political powers can summon up the will, Priscilla Ross suggests, a new sense of optimism is in order.
Emerging global mining companies are certainly no endangered species. If anything, they are the antithesis. Any need for proof was satisfied at the recent Global Emerging Market '96 conference held in London, when a hefty line-up of major and junior mining companies were a tribute to their current proliferation. Such rapid reproductive tendencies have allowed the global map that charts the flow of exploration and investment funds to be redrawn and become more acceptable.
Among the big cats to make presentations in London were Canada's Barrick Gold, Echo Bay and Teck and the South African company, Gencor. A number of tiger cubs introduced exotic projects in Africa and more predominantly, Latin America. The fashion parade of mining company project reviews and previews was balanced with speeches from investment fund managers plus two notable figures, the former German Chancellor, Mr Helmut Schmidt, and Ex-Deputy Governor of the Bank of England, Mr Rupert Pennant-Rea who grew up in Zimbabwe and is now a Director of Sherritt International Cuba.
The conference revealed a high sense of optimism. Budgets for global gold exploration have spiralled into a boom this decade, from $1.5bn in the early 1990s to a more sizable $2.5bn in 1995, leaving few to doubt that the exploration bonanza is here to stay. Latin America has been the greatest recipient of these funds with $230m spent in 1992 and $780m last year. Africa has little to worry about; spending has risen from $80m in the early 1990s to $310m last year. The US, to contrast, garnered $290m in 1995 compared to the $330m spent at the beginning of the decade.
The political changes that have occurred during the 1990s have opened up the world to Western capital and technology and made mining and exploration possible virtually world-wide.
Mr David Williamson, Managing Director of David Williamson Associates which specialises in fund raising, research and investor relations for mining companies, pointed out that only a few years ago most countries in Latin America, Africa, the Soviet bloc, China and South East Asia either did not permit foreign exploitation of mineral reserves or placed impossible hurdles in front investment.
Today that has all changed. Over the next few years, expects Mr Williamson, considerable developments will continue in countries previously off-limits such as Mozambique, Angola, Zaire, Argentina and Brazil. In the Far East, Vietnam and Burma could also become prominent. Indonesia, which has already been discovered, is likely to remain an important venue for mining development. China should feature strongly and if the countries of the former Soviet Union can get their act together and sort out ownership title and rights of exploitation, opportunities there will be vast. From a macro view of global mining exploration and development, some of the companies with an African perspective will also gain interest. …