South African financial services institution Nedbank Capital is looking to invest in virgin ground exploration for gold across Africa, specifically in Tanzania, Ghana and Burkina Faso.
Apart from greenfield gold projects in the three countries, Nedbank is also considering investing in Mozambique’s emerging coal industry.
The investment firm is also looking outside Africa for greenfield projects to finance. Canada and Australia are top in the company’s agenda.
“We consider any investments outside Africa as part of an African strategy for greater, long-term investment in the continent, as Toronto, Vancouver and Perth are significant mining business communities that spearhead financing and mining project development in Africa,” said Paul Miller, Mining and Resources Investment Banker at Nedbank Capital.
The company’s mining investments spans across Africa with financing of projects in Namibia, Malawi, Sierra Leone, Liberia and Kenya; the most recent of Nedbank Capital’s endeavours is its joint venture with Standard Bank to refinance, this January, Paladin Energy’s Langer Heinrich uranium mine based in Namibia, and refinance Paladin’s Kayelekera uranium mine, in northern Malawi.
Nedbank Capital has however invested more in its local mining industry as Mr Miller claims the South African industry remains the largest in Africa despite the challenges it has faced over the years.
As the financial services provider seeks more opportunities for investment across Africa and the world at large, it is expected to continue investing more in South Africa, but Miller noted that 2014 is a sensitive year for the country’s mining industry as election holds. He believes that investors like Nedbank, and mining companies would be watching the policy and political frameworks that develop before and after the election closely, as they would affect industry confidence.
He also said potential investors and mining companies alike would keep a close eye on the state of labour relations in the country this year – prolonged strikes, often violent had impacted negatively on the industry in the last five years.
The history of labour unrest in the South African mining industry had made it less attractive to foreign investors who now see countries like Ghana, Mozambique and Botswana as better investment destinations.
“This is a worrying trend for the South African mining industry, as the country has always relied on foreign investment as its main source of funding for new mining ventures. South Africa does not have the large capital base that is required to finance new large greenfield mining operations,” said Miller.