https://www.engineeringnews.co.za

Sub-Saharan Africa remains home to riskiest mining sector – BMI

10th July 2017

By: Creamer Media Reporter

     

Font size: - +

JOHANNESBURG (miningweekly.com) – Sub-Saharan Africa’s mining sector will remain the riskiest in the world over the next few years on the back of policy uncertainty, underdeveloped infrastructure and political risk.

BMI Research on Monday said that, overall, sub-Saharan Africa scored 38.9 points out of 100 – behind all other regions – in the global Risk/Reward Index (RRI).

This was a result of low scores in country risk, industry risk and business environment indicators.

The firm pointed out that a series of regulatory changes across major mining countries eroded investor sentiment, leading to policy uncertainty, with the region further threatened by underdeveloped infrastructure and high political risk.

“Policy uncertainty will be a particularly pertinent theme that will hamper growth opportunities in sub-Saharan Africa in the coming years as major mining markets in the region make changes to their regulatory frameworks,” BMI commented.

Despite this, the region performed well in BMI’s mining industry value growth score, which indicates that, despite the high-risk environment, sub-Saharan Africa’s mining sector is dynamic and remains attractive to investors owing to low labour costs and a solid competitive landscape.

Ghana will be the region's best performing country with a strong industry risk profile, surpassing the European average.

“Ghana has improved its score from 53 during the last quarter up to 55.5 currently, allowing the country to leapfrog South Africa and Botswana and come top of our regional scores,” the firm highlighted, pointing out that all three countries were expected to perform well on a variety of business environment indicators.

The three countries obtained an average aggregate score of 54.1 on the RRI, slightly above the Americas region average of 50.1, but still below the Asian regional average of 56.1.

“This score reflects miners' ongoing priorities to tread carefully and avoid overexposure to high-risk environments as they look to improve balance sheets rather than engage in risky growth ventures,” BMI said.

Further, infrastructure deficits and high political risk solidified the position of Sierra Leone, Liberia and Mauritania as regional laggards and the three worst performing countries on the index.

Mauritania, in particular, has seen its score fall from 26.5 during the last quarter to just 20.7 currently, as a result of a less favourable risk outlook.

Edited by Creamer Media Reporter

Comments

Showroom

Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 
Schauenburg SmartMine IoT
Schauenburg SmartMine IoT

SmartMine IoT has been developed with the mining industry in mind, to provides our customers with powerful business intelligence and data modelling...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.22 0.284s - 156pq - 2rq
Subscribe Now