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June 29, 2022


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Western miners lag as oil powers enter race for Africa’s critical metals

Johannesburg: Reuters – Africas

Risk aversion is likely to leave major Western miners lagging in a race to tap Africa’s reserves of critical raw materials that has gathered pace now Middle Eastern oil powers have begun to emulate China’s years of investment on the continent.

Attracting the capital needed to advance copper, cobalt, nickel and lithium projects in Africa will be high on the agenda when executives, bankers and government officials gather in Cape Town, South Africa, for the annual African Mining Indaba beginning on Monday.

For the big listed miners, the problem is convincing board members anxious to keep shareholders onside, an issue China and the state-backed funds from the Middle East with a mandate to diversify from oil and gas do not face.

Major mining companies’ mergers and acquisitions teams have been busy negotiating in countries including Democratic Republic of Congo, the world’s top cobalt supplier, and third biggest source of copper. Potential deals in the country, however, are being held up in the boardrooms of Rio Tinto and BHP Group, two sources with direct knowledge of the matter told Reuters.

The sources said boards were mindful of the shareholder focus on ESG (environmental, social and governance) concerns and past scandals in countries viewed as high risk.

The reserves of a country such as Congo, however necessary for the transition to cleaner energy, have to be weighed against political strife, the danger of corruption and a lack of vital infrastructure.

Rio Tinto and BHP have held informal talks with Ivanhoe Mines to explore partnerships in the Canada-listed miner’s Western Foreland project in Congo, one of the world’s richest copper deposits, the sources said. They spoke on condition of anonymity because they were not authorized to speak publicly on the issue.

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