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(Last updated: 30 Jan 2012)
Trends and opportunities
The market
East Africa is known to have large untapped mineral deposits and energy reserves, which continues to attract prospective mining and exploration companies from around the world. (Source: Future Directions, ‘Australia and the New Great Game in East Africa’, 3 May 2011). The countries within the region are subsequently at different stages of realising this potential.
East Africa is known to have large untapped mineral deposits and energy reserves, which continues to attract prospective mining and exploration companies from around the world. The countries within the region are subsequently at different stages of realising this potential.
Kenya’s mining sector is largely under-explored, with the mining sector contributing 0.01 per cent of the GDP. Minerals found in Kenya include soda ash, fluorspar, limestone, barite, titanium, lead, nickel, copper, zinc gold, coal, iron ore, salt, dimension stone, silica sand, soapstone, manganese chromite, pyrite, rare earth elements and phyrochore. Other mineral occurrences include diatomite, vermiculite, gypsum, natural carbon dioxide and a variety of gemstones. (Source: Draft Kenya National Minerals and Mining Policy, December 2010).
Most of these minerals still remain unexploited due to inadequate knowledge on their status, economic viability and appropriate mining technologies.
Tanzania: There are rich deposits of gold, diamonds, tin, tungsten, carbonates, coal, iron ore, uranium, nickel, platinum group metals (PGM) and gemstones in Tanzania. Resolute Gold opened the first gold mine in Tanzania in 1998. Barrick Gold, Placer Dome, Ashanti, Anglogold and Pangea quickly followed in succession.
Currently gold is the key mineral mined in Tanzania; however it is expected that coal, nickel and uranium production may grow in importance as Tanzania looks into expanding the sectors contribution to the GDP from the current 2.8 per cent to 10 per cent by 2025. (Source: Tanzania Development Vision 2025).
Uganda is under explored and its mineral wealth underdeveloped. Minerals found in Uganda include gold, be metals and industrial minerals – vermiculite, pyrochlore, rare earth elements, titanium among others. A discovery of petroleum wells in the Lake Albert region has enhanced investor interest in the sector.
In 2009 an airborne geophysical survey financed by the World Bank, African Development Bank and Nordic Development Fund was completed. (Source: Department of geological surveys and mines in Uganda) This coupled with the Ugandan government’s efforts to offer clarity through revision of the mining Act, saw an upsurge of interest in the sector with more mining licences being awarded.
Australian interest in the East African mining sector has been increasing in the recent years. It is expected that this will grow further once regulatory framework challenges amongst other investor concerns are addressed. Competitors are currently Canadian, UK and Chinese firms.
Opportunities
Only approximately 10 per cent of Kenya’s territory has been covered in recent airborne geophysical surveys. (Source: Kenya Chamber of Mines). This lack of adequate data is the main reason for which the country is lagging behind its neighbours in this sector. In order to attract investment in the sector there is a need for adequate mineral and geological data.
Kenya is an exploration country and as such there is need for drilling services. Currently there has been an increase of junior mining firms entering the market and taking advantage of the under explored regions.
Opportunities therefore lie in:
- Mineral exploration
- Mining software
- Mining processing technologies
- Mining equipment
- Engineering services
- OH&S consulting
- Mining education and training services – best practice
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