According to Mining, despite the fact that, through the enactment of new laws and regulations, local governments in Sub-Saharan Africa are starting to claim a larger share of their countries’ mineral resource wealth, BMI Research believes that investments in the region will continue to rise in Q3-2018.
“On March 10 President Kabila signed into law a new mining code that will raise royalties on minerals across the board, as he tries to shore up the support and funding need to retain power. While these changes pose downside risks to the DRC’s investment profile, we do not expect them to impact our positive growth outlook for the country’s mining industry over the coming quarters,” the report reads.
On the risky side there is Tanzania, says BMI. According to the firm, asset sales and reconsiderations of planned investments are in the forecast due to John Pombe Magufuli government’s recent decision to restrict foreign banks, insurance companies and law firms working or financing the mining sector. “The new restrictions follow on from laws passed last year that ban the exports of gold/copper concentrate and allow the renegotiation of contracts with mining companies,” the market researcher explains.
When looking at South Africa, BMI’s report is filled with good news. The election of Cyril Ramaphosa -the firm says- improves the country’s investment environment. In particular, BMI highlights the fact that the Chamber of Mines seems to be open to negotiations with the new administration, as it postponed its legal challenge to the mining charter introduced last year.
“The appointment of Gwede Mantashe as the new head of South Africa’s Department of Mineral Resources will send further positive signals to investors that an agreement over the new charter in the coming months is possible, due to Mantashe’s popularity among major stakeholders in government and mining industry circles alike,” the report states.