Despite Africa still being the continent with the lowest per capita gross domestic product, in the first decade of this century all ten of the fastest growing economies in the world were in Africa, and African foreign direct investment rose five-fold between 2001 and 2010 and this sustained growth can be partially at least partially attributed to the commodity market. However as indicated in the State of the Market report on Africa from IntierraRMG, the worldwide fall in exploration activity since October 2011 has been apparent in Africa, where the malaise has been severe since mid-2012.
Annual figures have disguised a recent slump in drilling activity with reports in the five months to the end of May dropping to just 250, but with the total drilling activity for the continent increasing last year to an overall 1,240 reports. Despite this recent drop, gold has retained a consistent share of the total; 61% in 2010 and 2011, 56% in 2012 and 65% over the first five months of this year. Drilling reports for African gold peaked in October 20121 at 83 prospects and 80 the following month but dropped to 23 prospects in May.
Chris Hinde, Editorial Director of IntierraRMG said “This represented over 85% of the drilling reports for May, with barely any exploration on the continent for other metals (there was a total of only 27 drilling reports). Drilling for copper in Africa slumped to just three reports in May. Reports on copper drilling had reached 18 prospects in each of September 2011 and August 2012, but had fallen to seven prospects in April 2013.”
According to the IntierraRMG database of almost 3,500 listed companies, a total of $829 million has been raised since end-May 2011 for exploration in Africa. This financing includes money raised for prospecting, sampling, exploration drilling, resource-definition drilling, surveying and for preliminary metallurgical test work. Money raised for gold exploration dominates the two-year ranking, accounting for almost 57% of the total. Some way behind, the search for copper, coal and iron ore account for only 7.9%, 7.2% and 6.3%, respectively.
Given the dominance of gold exploration in the financing objectives, it is no surprise that West Africa accounts for over 41% of the African total. The region is defined for this purpose as Burkina Faso, Liberia, Mali, Senegal, Sierra Leone, Ghana, Guinea, Ivory Coast, Mauritania, Morocco, Niger and Nigeria. A further 18% of the finance raised over the past two years is accounted for by exploration in the four Southern African nations of Mozambique, Namibia, South Africa and Zimbabwe.