Investment in African mining to rise despite local government beneficiation laws

The mining industry across sub-Saharan Africa is set to continue receiving higher volumes of investment in Q3 2018, according to market research firm BMI Research.

This is despite the fact that some African countries have moved to tighten laws and regulations regarding foreign investment in recent years, in order for local governments to receive a greater share of a nation’s mineral wealth.

In its industry overview report, BMI references the recent reform of the Democratic Republic of Congo’s mining code as an example of a situation that challenges all the parties involved, but is very unlikely to drastically deter miners from investing in the country.

“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,” said the report.

“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 also highlighted rallying conditions in the global mining sector as another boon to the African mining space, with improved balance sheets amongst several firms set to increase the volume of mergers and acquisitions on the continent.

In particular, the firm foresees major African players such as AngloGold, Randgold and Impala Platinum improving their profit margins in 2018, which will boost the fortunes of African host countries as well.