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It was heartening to see such

a strong turnout for this year’s

Africa Down Under, with nearly

1,000 delegates joining Paydirt

for the three-day conference…

t was the first ADU since Western Australia lifted its border re- Mali that it is possible to develop, finance and construct a critical
Istrictions so as organisers, we always expected there to be sig- minerals project in Africa and there is a host of other ASX-listed
nificant interest from international delegates but even we were companies waiting to follow.
staggered by the number of visitors we welcomed. The question will inevitably come down to finance. Traditional
Eighteen African delegations, including nine senior ministerial Western financial institutions are still nervous about funding lithi-
delegations, were at the conference with more than 300 delegates um, rare earths or graphite projects due to their shallow, immature
coming from Africa in total. and opaque markets.
That presence reiterated the special relationship Australian min- Even critical minerals developers in Tier-1 countries have found
ing has with the African continent. Australian companies have it difficult to source finance. Instead, many turned to Chinese
been a preferred partner on projects throughout the region for groups, further concentrating critical minerals supply into that mar-
more than 20 years. Even during the global pandemic, Australian ket. Western governments have stepped in, with Australia, the EU
investment in Africa rose, including construction of two new gold and the US now offering loans and grants to companies develop-
mines in West Africa. ing new projects in their own countries.
This year’s conference showcased just how strong Australian This policy may have to be expanded. US President Joe Biden’s
mining’s reputation now is with African governments. With many $US3 billion package was originally intended for domestic-only
trying to restart economic development after the pandemic, they projects but the Government quickly realised there is little chance
are turning to Australia and its reputation for transparency, strong of the US providing adequate volumes any time soon. The pro-
environmental and social credentials and its lack of historical geo- gramme was thus extended to “friendly countries” such as Canada
political baggage. and Australia. How long until Africa, with its vast critical minerals
Unsurprisingly, the themes dominating ADU 2022 were the potential, is also considered as a safe investment, as long as it is
same as those raised at more domestic-focused conferences Western companies building the project?
this year, critical minerals, decarbonisation and diversification of The problem is the unpredictable investment landscape of Af-
boards, management and ownership. rica. Western governments and major corporations are reluctant
Governments across the continent have recognised the oppor- to back critical minerals projects where ESG performance is un-
tunity critical minerals development has to offer and most took time proven and there is a risk of dramatic shifts in government policy
during their visit to speak with members of the West Australian around foreign ownership. The likes of General Motors, Volkswa-
Government about how the State has established itself as an inter- gen or Tesla do not want to be caught up in an environmental or
national critical minerals hub in such a short space of time. community disaster at a mine they are sourcing material from.
There were echoes of previous ADUs in the desire to replicate That could lead Australian companies with African projects back
WA. More than a decade ago, African ministers arrived in Perth into the arms of Chinese groups, leaving Western countries miss-
looking for advice and knowledge on how to emulate WA’s mas- ing out once again.
sive iron ore sector. Several African jurisdictions have world-class There is opportunity for African governments in all of this. The
iron ore mineralisation but unfortunately, the challenges of infra- rise of critical minerals presents the chance to enforce the highest
structure, geography and investor demand for rapid returns has international standards around ESG and tax transparency.
meant so far those ambitions remain unrealised. If African governments can develop the right policy settings, they
The situation in critical minerals could be different. Where iron could attract loans, grants and other investments and at the same
ore and other bulk commodities require massive infrastructure in- time, ensure their citizens benefit from mineral resources to an ex-
vestment and long lead times (and even longer payback periods), tent that hasn’t previously happened.
projects in lithium, nickel, rare earths and graphite can be built on
similar scales and cost structures as gold and copper, which have
proven highly achievable in the African context.
Leo Lithium Ltd is proving with its Goulamina lithium project in dominic@paydirt.com.au @DominicPiper

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