Limited infrastructure and volatile commodity markets lead mining companies and their logistics and transport partners in Africa to improve via innovation.
Rapid changes are afoot in Africa’s bustling mining sector -- a major engine of the continent’s economic growth, but which now faces challenges that include infrastructure limitations and volatile global commodity prices. In response, mining companies are moving to find new ways to adapt flows to and from remote extraction centers in phase with demand, and are seeking improved speed and quality of service from compliancy-reliable logistic and transport partners.
Africa boasts one of the world’s largest reserves of diamonds, minerals and precious metals like gold, cobalt, bauxite, uranium and platinum. Top producers include South Africa, the Democratic Republic of Congo, Ghana, Botswana and Namibia, whose mining sectors powered Africa’s 5% average annual economic growth over the past decade.
That supply found strong demand in recent years, especially from booming economic growth in China requiring enormous imports of industrial and infrastructure materials like steel, copper and aluminum.
China’s rising stake of the global IT and communications sectors, meanwhile, rivaled with those of Europe, Japan, the US and emerging nations like India in consuming minerals and precious metals from Africa. Those were sought to manufacture goods ranging from smart phones to computers, and components in satellites and airplanes.
But China’s recent economic slowdown has accentuated an even earlier slump of commodity markets, where copper and nickel have slipped 30%, iron ore 40%, and coal 10% for coal. As a result, Africa’s mining sector – which comprises over 50% of total GDP for several African countries – has faced disruption and challenges forcing all participants to adapt.
A major focus in that has been limited national infrastructure and transport assets, whose degree and rate of development differ drastically across borders. The far-flung locations of extraction sites -- and absence of trans-African transportation networks -- have further complicated efforts to efficiently move goods in and out of mining centers, and modulate those flows as demand fluctuates.
“The rate of infrastructure development, the huge volume of material transported over long distances, and the fragmentation of the region imposes detailed planning to respect deadlines, and makes rapidly changing plans very hard,” explains Helle Rasmussen, director for Bolloré Logistics’ mining unit in Johannesburg. “But all that’s starting to improve.”
Indeed, recent advances have permitted mining groups and their logistics and transport providers to start increasing the speed, quality and control of African operations. That has come about in part by considerable development of several ports and road systems, reducing maritime and surface transport time and distances between mines, clients, and suppliers.
A greater degree of intra-African networking is also aiding end-to-end commodity storage and transport. Facilities in Zambia’s Copperbelt city Chingola, for example, are being used as a collective logistics hub for large extraction operations in neighboring Democratic Republic of Congo.
Similarly, large sector stakeholders in other areas across Africa have pooled limited resources like warehousing and loading sites to mutualize infrastructure – optimizing use of mining logistic assets awaiting further development.
Along with economies of time and money that improved infrastructure and organization have produced, mining companies also insist their logistics and transport partners are highly-ranked in terms of ethical compliance. Those guarantees of compliance, reliability and transparency are vital in a sector that had seen the rise of illicit operators cutting prices by violating regulations.
“The challenges that have risen over time have made all of us involved in mining find ways of improving service, adapting quickly to changing variables, and helping clients operate at lower costs,” says Ms. Rasmussen, whose Bolloré Logistics’ is a major player in the continent’s sector, with 90 ongoing mining operations in 22 African nations.
“Despite the recent disruptions, mines in Africa will continue operating, exporting and seeking the most efficient solutions to problems from innovative sector partners,” “Ms. Rasmussen adds. “Its future remains bright.”