West Africa’s mining and industrial sectors are characterised by growth and challenges, says multinational banking and financial services provider Absa Corporate and Investment Banking (CIB) resources and energy coverage head Shirley Webber.

The bank highlights significant opportunities in gold mining, owing to favourable geological conditions that attract international mining companies and financiers; however, it also acknowledges that inadequate infrastructure and political instability are pertinent obstacles in the region.

Absa CIB notes that, in recent years, there has been a shift in gold production dominance from South Africa to West African countries such as Ghana, Burkina Faso and Mali. It highlights the region’s bauxite, manganese, copper, cobalt, iron-ore and lithium as being essential in the production of aluminium, steel, electrical components and batteries.

In conveying the essential role West Africa plays in the global gold market, the bank refers to the World Gold Council’s gold mining production volumes report of 2022, highlighting that, in the same year, Burkina Faso produced 96.2 t, Ghana 127 t, Guinea 63.2 t, Mali 101.7 t and Senegal 19.7 t, compared with other major global contributors, such as Australia, with 313.9 t, and Russia, with 324.7 t.

The bank also notes that West Africa has vast untapped reserves that add to the growing focus on the region and the advancing of funding projects to boost production volumes.

Regional Focus

Absa says several prominent mining companies are directing their investments towards West Africa: diversified miner Rio Tinto is undertaking what is being called “Africa’s biggest mining project”, with its Simandou iron-ore project, in Guinea, while gold miner Centamin is undertaking the Doropo gold project, in Côte d'Ivoire.

“These investments not only underscore the region’s important role in the global mining industry but also reflect international companies’ confidence in West Africa’s minerals sector,” says Webber.

Absa contends that it is actively supporting the mining industry in West Africa through leveraging its corporate and investment banking expertise. To foster sustainable mining practices in the region, financiers should capitalise on critical resources, such as cobalt, copper and lithium – all essential commodities for decarbonisation technologies.

“Absa aims to balance operational goals with sustainability, demonstrating its proactive approach to supporting the mining sector’s expansion in West Africa,” asserts Webber.

The bank notes that inadequate infrastructure presents an opportunity for innovation and collaboration. In this regard, investments in infrastructure development, and partnerships between mining companies and local companies, are viewed as a way of overcoming this obstacle to build infrastructure that benefits both parties. In addition, Webber highlights that the reliance on one commodity can make an economy in this region vulnerable to price volatility associated with that commodity.

The region is taking proactive measures to explore and develop new resources, industries and markets, she adds.

Resource diversification can mitigate pertinent economic risks and also create new opportunities for growth and prosperity; added investments in West Africa should be viewed positively, as they add impetus to the region’s growth agenda, Webber concludes.