BUUMBA CHIMBULU writes
AFRICA’S mining sector this year still offers opportunities for expansion despite the challenging global macro environment and uncertain commodity prices, says head of Mining and Metals at Standard Bank Group, Mark Buncombe.
Mr Buncombe said this was likely to drive capital formation, jobs and growth beyond the mining sector.
In a statement, Mr Buncombe said investment in solar power plants to replace more expensive diesel generators would have the additional benefit of improving miners’ environmental footprint while broadening investment beyond the mining sector.
“Africa’s miners are increasingly seeking to optimise cost, liquidity and working capital requirements using additional products like asset financing, invoice discounting and inventory financing.
“2019 is also likely to see miners, “increasingly look to their bankers to meet the financing needs of their clients’ broader supply and partner networks,” Mr Buncombe said.
Mr Buncombe said banks were also expected to develop a much broader, detailed and much more sophisticated view of value chain financing.
Mr Buncombe also said this was also expected to extend to governments’ indigenisation efforts as, locally-owned players tend to be more prevalent in the ecosystem.
“Efficiency improvements and portfolio and asset optimisation are expected to continue into 2019 as companies remain committed to moving down the cost curve in response to the 2013 to 2015 downturn.
“With more investment expected where policy makers have actively encouraged investment. Ghana in 2018 was a case in point, showing us that once policy makers build a business and investment-friendly legislative environment the market responds very quickly,” Mr Buncombe said.