Clara Denina, Helen Reid

JOHANNESBURG – Russia sanctions have increased demand for metals to support the energy transition. This has made Africa more attractive for big miners. They are the only ones with a viable alternative to Africa’s resource-rich resources.

Investors and companies are now looking at projects that they might not have considered before. Governments are also looking towards Africa to make sure their country can purchase enough metals in order to sustain an ever-increasing net zero.

The Investing In Africa Mining Indaba conference, taking place in Cape Town from May 9-12, 2012, will host the U.S. highest-ranking official since years. It also includes representatives from Japan Oil, Gas and Metals Corporations (JOGMEC), as a result of rising concerns about securing supplies.

Steven Fox (executive chairman, Veracity Worldwide, a New York-based consultancy for political risk and policy analysis) stated that “the reality is that most of the resources the planet wants are often located in difficult locations.”

According to him, the U.S. wants to present itself as a firm supporter of sub-Saharan Africa’s battery metals project.

While Africa has its problems, they are not more challenging than those in Canada. He said that it may be more difficult to bring about a successful project in Africa than in Canada or the U.S.

While the United States supported new domestic mines in its support, some projects remain stalled. Rio Tinto (NYSE :)’s Resolution Project was, among other things, halted due to Native American claims and conservation concerns.

The risks associated with mining in sub-Saharan Africa are still high. Last month, Russia’s Nordgold evacuated its Taparko gold mine in Burkina Faso due to a growing threat of militants. This highlighted the security challenges facing gold-rich Sahel mines.

South Africa is the most industrialized country on the continent, and its rail infrastructure has been deteriorating, forcing many coal producers to take their product by truck to port.

With Russia holding 7% of world nickel supplies, 10% of world platinum and 25%-30% of world palladium, Africa’s richest deposits start to look a lot more appealing.

According to George Cheveley (portfolio manager, Ninety One), “As mining companies, there’s not many opportunities. If you want to grow, then you have to consider riskier countries.”

He added that “Clearly, people after Russia and Ukraine are more sensitive geopolitical risk. You cannot predict which projects will work out or not.”

Kabanga Nickel in Tanzania was awarded funding by BHP Global Mines in January. Its CEO Chris Showalter indicated that it is experiencing increased demand from prospective offtakers.

Showalter explained that Russia is under Western sanctions for its invasion in Ukraine.

“Not everybody’s going be able get clean battery metals out of a friendly jurisdiction. I think that some hard decisions will be needed and people will need to make new choices about where to source them.”