Results of the Deloitte Insomnia Index – Challenges and opportunities mining companies could face in Africa

If you require a more detailed discussion with our mining leaders, contact the Deloitte South Africa Mining Leader,  Tony Zoghby, at +27 (0)11 806 5130 or tzoghby@deloitte.co.za and the Deloitte South Africa Mining Advisory Leader, Abrie Olivier, at +27 (0)82 874 6040 or aolivier@deloitte.co.za

Investing in African Mining Indaba Insomnia Index Findings

Delegates at the Investing in African Mining Indaba 2012 had the unique opportunity to participate in the Deloitte Insomnia Ondex. The fourteen themes selected had specific emphasis on challenges and opportunities mining companies could face when expanding their business into Africa. The Mining Indaba Insomnia Index results show that the top four opportunities mining professionals see in Africa are Exploration, Emerging Markets, Mergers & Acquisitions and Technology. The top four challenges identified by the Indaba delegates are: Infrastructure, Price volatility, Skills and Reporting & Compliance.

Mining the Detail

Opportunities

  1. Africa is home to the majority of the world’s mineral wealth and is therefore seen as a huge opportunity for mines and making exploration top of the opportunity list. Many parts of Africa are seen as an untapped market and therefore a potential growth opportunity.
  2. The expected demand from emerging markets for minerals could be seen as an offset to some of the risk that entering a new market brings. Africa’s relatively central location to emerging markets can be seen as a benefit from a supply chain perspective, both inbound and outbound.
  3. The major players in mining are typically target acquisition of developed assets and possibly see acquisitions of existing mid-tier mines operating in Africa as a faster growth and penetration strategy. Mergers & Acquisitions could overcome the lack of skills, local knowledge, goodwill and technology that mines could encounter when expanding into Africa. The consolidation of the mid-tier market specifically in South Africa could be another influencer for delegates seeing Mergers & Acquisitions as a big opportunity.
  4. Technology is an enabler for mines to mine deeper, assist with health and safety analytics and practices, employee training and to optimise operating efficiencies to name a few. It is therefore no surprise that miners see technology as an opportunity when considering expanding their business into Africa.

Challenges

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