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| Mineral wealth spurs growth |
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Data: SMBCE Corporate Research; UNCTAD Handbook of Statistics
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Africa is a continent rich in many mineral resources with 60% of the world’s diamonds, 40% of the world’s phosphate and 30% of worldwide cobalt reserves. Sub-Saharan Africa is no exception. Along with 26% of the world’s diamonds, the DRC is blessed with 45% of the world’s cobalt. Significant zinc deposits are present in Namibia and the DRC while Guinea is home to 30% of the world’s bauxite. Namibia and Niger hold 7.1% and 2.4% of world uranium, Gabon has significant manganese and Zambia possesses 3.4% of world copper and 3.6% of world cobalt.
Sub-Saharan Africa stands to benefit in that current poor returns from other asset classes, coupled with worries about rising inflation, has seen a sustained flow of investment into base metals and commodities in general. FDI flows to Ghana trebled to US$435m in 2006 mostly reflecting investment by Newmont Gold and Alcoa in the Valco aluminium group. Most of the US$377m 2006 inflow to Tanzania was in mining while in Cameroon, investments by Total and Pecten Cameroon helped FDI to reach US$309m in the same year.
SMBC is very active in supporting the mining sector. For example, we coordinated the US$2.1bn in loans for the Ambatovy nickel mine project in Madagascar. The transaction was awarded PFI Deal of the Year 2007 and Project Finance Magazine African Mining deal of the Year 2007.
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