Last year was tough for Africa’s mining sector, but industry players predict the sector will make a strong comeback in 2023.

Founder and CEO of Erudite, an EPCM enterprise operating in Africa, Johann de Bruin is one such person who forecasts better times ahead for the mining industry of Africa, predicting it will soon be thriving once more.

Andrew Bahlmann, the CEO of Deal Leaders International, also foresees a “resurgence” of the sector that may be “quicker than people expect.”

Many hurdles to overcome

In 2022, the mining sector was still struggling to revive from the effects of the pandemic, but also faced a number of setbacks and obstacles within various African countries. These included electricity issues, drawn-out employee strikes, and disruptions to the worldwide supply chain, to name but a few.

However, things could turn around for the mining industry this year. This is thanks to factors like the growing demand for minerals and metals key to the green transition, such as lithium, nickel, cobalt, and more.

De Bruin offered various predictions for mining in Africa in 2023.

Predictions for Africa’s mining sector in 2023

revival of the supply chain

The global supply chain was strained and disrupted last year for many reasons, from the war in Ukraine to power supply issues and the post-Covid stagnation the world is still recovering from.

However, de Bruin sees the supply chain recovering in 2023, although the hurdles it faces will not disappear. Instead, the world will continue to adapt to all of this change. Countries are finding ways to work through supply chain disruptions in unconventional ways with alternative solutions and will continue to do so.

More New international opportunities

It is likely that the world will be looking to Africa to assist with closing the gap in global fuel supplies that has plagued countries since Russia’s invasion of Ukraine.

The continent has potential to help meet global fuel demands, with high capacity to produce resources. It is therefore likely to gain both more international trading parters and to gain market shares, becoming a bigger competitor in the international extractives market.

The South African Rand’s weakness could be a benefit

Although there are different projections across the board of whether the exchange rate for the rand (ZAR) versus US dollar (USD) could improve this year, stay the same, or continue to be volatile, de Bruin predicts the exchange rate between the USD and ZAR will remain around the same as it is for a couple of years.

By the end of 2022, ZAR showed an 8.47% weakening year-on-year against USD. Although a weak currency is disadvantageous for the average consumer, de Bruin states it could be a good thing for exporters and this will benefit South Africa’s mining industry.

This is because a weaker rand means South African commodities and goods are cheaper for foreign trading partners, while, de Bruin says, “the rand value for exporters is higher, which means that producers receive more for the same goods.”

emergence of lots of fresh projects

De Bruin sees more investment into African mining happening this year, funding mineral exploration projects, new operations, and mine expansions.

This is particularly where battery minerals (those previously mentioned that are required for the green energy transition) are concerned. Demand for these commodities will keep growing as demand for electric vehicles and similar technologies and equipment increases.

Africa could become a key part of the battery commodity market due to its wealth of pertinent commodities.

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