By Truemon Thottathil
LONDON (Scrap Monster): As the Chinese Premier Wen Jiabao recently said “China can’t grow in isolation”, the surging economy of Asia primarily concentrated with China and India will eventually boost the investment in Africa’s metals and mining sector, as the hunger for resources from these countries continue to grow.
Rapid economic growth and surging infrastructure facilities in Asia’s two major growth balls – India and China are calling for more and more resources. Attributed to this, the resource rich nations in Western Africa are experiencing an influx of foreign investment capital from Asian mining companies as well as global giants.
Western Africa still have an abundance of undeveloped natural resources, such as gold, uranium, bauxite, iron ore and mineral sands. With its abundance of natural resources and metals, investor appetite for Africa is growing day by day.
Reportedly, mining companies including Azumah Resources Limited (ASX:AZM) (West Perth, Australia), ArcelorMittal (NYSE:MT) (Luxembourg), Vale SA (NYSE:VALE) (Rio De Janeiro, Brazil), African Minerals Limited (LSE:AMI) (Guernsey, United Kingdom), Rio Tinto plc (NYSE:RIO) (London, England), Anglo American plc (PINK:AAUKY) (London) and recently India-focused Vedanta Resources plc (LSE:VED) (London, England) are investing more than $36.2 billion in the 53 active mining related projects in West Africa.
These companies’ primary aim would be to procure mineral resources to satisfy the rapid economic growth occurring in countries like in India and China. Demand for commodities such as copper, nickel, zinc and industrial minerals such as coal, and iron ore are estimated to double in the next 20 years.
“The most active country in Africa has been China, gradually being caught up by Indian and Brazilian firms, said an analyst from Business Monitor International (BMI), a leading supplier of country risk and financial markets analysis. "Much of this investment is heading towards West African states, mainly for iron ore and gold production."
The boom in global commodities markets which has seen copper, iron ore and alumina reach record prices will motivate the investments to African countries. Infrastructure remains a challenge for companies operating in Africa, but this also can be taken as one another investment option.