JOHANNESBURG (miningweekly.com) – West Africa has the potential to become one of the top five gold-producing regions in the world, according to Wood Mackenzie mining industry analyst Jonathan Leng.
Numerous new gold-mining projects are being developed in West Africa, particularly in Ghana, Burkina Faso, Mali, Mauritania, Liberia and Sierra Leone, but none of them are big enough to threaten the top gold producer, China, he adds.
“The recent boom in the industry is the result of two main factors: first, the strong rise in gold prices to their current high levels, which stimulated exploration and development of projects and made the reward for mining in one of the world’s more risky areas appear worthwhile, and, second, the ongoing success of mining projects in established mining countries in the region over the past few decades, which has instilled confidence in miners and explorers in less well-developed, higher-risk countries such as Côte d’Ivoire.”
West Africa has experienced significant growth in gold production over the last two decades to 6.7-million ounces in 2010, accounting for nearly 8% of the global supply. Continued growth is forecast at about 11-million ounces by 2015.
Global senior producers account for more than half of the region’s mine supply and are likely to maintain current levels with significant investments in expansion and development projects. West Africa is viewed as attractive for investment, suggesting potential for corporate activity, states a report from financial services provider BMO Capital Markets.
Gold exploration company ASX-listed Middle Island Resources MD Rick Yeates states that the gold ‘boom’ is not an overnight phenomenon, but rather a result of a combination of factors including extraordinary gold prospectivity, the reform of mining laws in many jurisdictions, improving sovereign risk profiles and the persistence of companies in establishing the region’s credentials.
Further, Australia-based Viking Ashanti MD Peter McMickan notes that there has been heightened interest in gold mining in West Africa for some time.
“A healthy mix of major multinational miners, midsize producers and junior explorers, predominantly from the US, Canada, South Africa and Australia, has been active in the region,” says McMickan.
He states that a significant driver for the renewed interest has been the changed view of risk and reward in the region. Companies have now demonstrated that it is viable to do business in the region and the opportunities for the discovery and development of major gold deposits are considered good.
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