The South Africa-based division of global consulting engineering, project management and implementation group Hatch Goba attended the second African Iron Ore Conference, which was held in Johannesburg on November 5 and 6.

“The conference considered several issues involving iron-ore, specifically in Africa,” says Hatch Goba mining and metals consultant Peter Raymond.

One of the main challenges affecting the industry throughout the continent is a lack of infrastructure. “This is particularly true of West Africa, which is rich in iron-ore deposits. “This places massive strain on the conti-nent’s iron-ore sector, as there are insufficient logistics services to get adequate amounts of the commodity to ports for export,” he explains.

“In some cases, it is essential that mining companies invest directly in infrastructure development or at least engage with other mining companies to ensure that infrastruc-ture is put in place. “However, very few mining companies have the capital or access to the necessary credit to achieve this,” says Raymond.

He suggests that a group of mining com- panies could form a consortium to share infrastructure costs, which could poten-tially lead to increased interest from Chinese investors, who could help finance infrastruc-ture projects.

“The costs of laying down a rail line or devel- oping a new port are high, but additional challenges lie in developing rail lines through heavily populated areas and in areas that are covered in indigenous rain forests, such as parts of West Africa,” Raymond says.

Some African countries rely on large mining projects for the financing of large-scale infrastructure. However, it is challenging for African mining companies to commit to large mining projects without the guarantee of the necessary infrastructure to export the ore and without the resources to finance this themselves, he explains.

“There also needs to be commitment from governments with regard to what they need and what their requirements are. “It is also necessary for mining companies to have the ability to work with govern-ments to develop what is required for both stakeholders. “In one or two African countries, the governments have the necessary agreements in place, as these countries are more stable than before, but Africa is still not a settled continent,” Raymond says.

Meanwhile, he notes, expansion projects in the African iron-ore sector are capital intensive, which represents a challenge to the sector, as there has been a “general downturn in the global metals industry, particularly in capital investments, which is highlighted by many mining majors announcing significant squeezes on capital projects”.

Further, the iron-ore sector in Africa requires improved beneficiation capabilities to allow for the production of fine iron concentrate, rather than directly exporting the raw materials. Raymond notes that this can be developed in areas where a cluster of mines operates, thereby enabling the mines to share the capital costs of developing improved beneficiation.