Investors and mining firms gathered on Monday at Africa’s biggest industry conference amid a newfound optimism that the uptick in commodity prices could shore up investment after years of downturn, Africa TVC News reports.
Over the last few months, iron, copper and tin prices have risen sharply and have rekindled the morale of a sector that had previously been in a downturn.
Peter Leon, co-president of Herbert Smith Freehills Africa Practice says: “The reason we had this raw material boom, which stopped three years ago, was because of the Chinese economy, when it turned into what it is today So the demand from China has played an enormous role in the price of raw materials, and it is not ready to change. “
The fall in prices on the African continent has wreaked havoc both in the accounts of companies and labourers.
Between 2014 and 2015, Brazilian mining giant Vale announced that it lost more than one billion dollars in Mozambique alone. And in South Africa, the mining industry has cut 50,000 jobs from 2012 to 2015, or 10% of its workforce, according to the Chamber of Mines.
There’s however now a glimmer of hope to the industry.
Rick Rule, the President and CEO of Sprott US Holdings said: “I think that the overall prospects for Africa are improving as the outlook for the mining industry improves. This is not an improvement in the same proportions as in the last decade, but just comparing to what we have known for 2-3 years.”
The annual four-day Mining Indaba in Cape Town takes place as demand in China, one of the world’s biggest consumers, begins to stabilise.
Africa’s biggest copper producers Zambia and the Democratic Republic of Congo (DRC) were among the worst hit by the decline, with thousand of jobs lost over the last three years.