Clara Denina and Helen Reid

JOHANNESBURG, (Reuters) – The urgent need for new metals sources for energy transition has increased Africa’s risk appetite for large miners who are limited in other options for this resource-rich continent.

While investors and businesses are looking for projects, governments also look to Africa. They want to be able to procure sufficient metals to support an expanding net-zero.

The Investing In African Mining Indaba conference, May 9-12, Cape Town, will feature the U.S.’s highest ranking official for years, according to organizers. Also, representatives of the Japan Oil, Gas and Metals Corporation, (JOGMEC) will be attending, in a clear sign that rich countries are increasingly concerned about securing their supply.

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 places.”

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

Although Africa is full of its own challenges, these challenges can be no different from the challenges that Canada faces. He said that it may be more difficult to bring about a successful project in Africa than in Canada or the U.S.

Although the United States supports new domestic mining, projects are still in limbo. Rio Tinto (NYSE :)’s Resolution Project was, among other things, halted due to Native American claims and conservation concerns.

There are high risks to mining operations in sub-Saharan Africa. Russia’s Nordgold, which operates in Burkina Faso, abandoned the Taparko mine of gold in Burkina Faso last month due to an increase in militant threat.

Even in South Africa’s industrialized economy, some coal producers are forced to use trucking to transport their products to the ports.

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.

George Cheveley is Ninety One’s portfolio manager. He stated that “as a mining company there are not many opportunities” and suggested that if you want to grow you will need to consider riskier countries.

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

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 stated that Russia’s invasion of Ukraine has prompted Western sanctions to be placed on Russia.

“Not all people are going to have the ability to obtain clean battery metals in a friendly country, so some difficult decisions may be necessary, and it will force people into making new decisions about where they want their source.”