An improving political climate, and the potential for major mineral discoveries, has reawakened interest in Africa among Australian mining companies that have traditionally rated the continent too risky.
It's not a stampede, but there's definitely a significant upswing of interest in a number of African countries, said Peter Sullivan, chief executive of Perth-based Resolute Mining Ltd., which operates a gold mine in Tanzania and is planning a new gold mine in Mali.
You still have to treat it on a country-by-country basis, and some countries are not yet out of the woods, but there are major changes under way, Sullivan told Reuters on the sidelines of an Africa Downunder conference.
Sullivan's optimistic view was echoed by other executives at the two-day conference, who said the skills of Australian miners were easily transferred to parts of Africa because of similarities in geology and geography.
An absence of mid-sized mining companies in Africa created opportunities for smaller Australian miners, while the continent had also moved on from an era when many of its leaders were former guerrilla fighters.
Marc Flory, chief executive of zinc explorer AIM Resources , which is planning to set up a mine in Burkina Faso, said some countries remained in the no-go category, but Australian companies were learning to work around these areas of instability.
Shares in AIM jumped almost 50 percent this week when it said it aimed to start production up to a year ahead of schedule.
The similarities and the potential to get hold of bigger targets than in Australia, which has been extensively explored, attracted Bill Turner, chief executive of Anvil Mining Ltd. , which is producing copper in the Democratic Republic of Congo (DRC).
Both terrains have somewhat similar geologies with differences. You have deserts and savannah woodlands. These are environments with transferable skill sets, whereas if you look at Canada it's glaciated and needs a different approach, he said.
Africa also lacks a centre to its mining industry. You have really big companies, like Anglo American, and very small businesses. Australia's mid-tier companies have a lot to offer.
Anvil was one of the first miners to re-enter the DRC after decades of internal trouble. It operates the Dikilushi and Kulu copper mines, which, combined, produced a profit of $22.5 million in the June quarter from an output of 11,098 tonnes of copper.
DRC has settled down considerably, Turner said. We are seeing more international players attracted to the country.
John Borshoff, chief executive of Paladin Resources Ltd., which is close to starting production of uranium at the Langer Heinrich mine in Namibia, said Africa's internal troubles in the 1970s and 1980s meant it had missed an important phase in the development of the world's mining industry.
In the 70s and 80s, when there were (mining) booms in Canada and Australia, Africa was a basket case, Borshoff said. It was simply too risky to do business at that time.
Compared to those times a lot has changed. There is a lot more order. The new breed (of leader) has seen that the future is resources, he said.
Debate was beginning on how much social involvement a mining company should have, but it was not on the same level as South America, which has seen a significant rise in nationalism.
AIM's Flory said there were parts of Africa he would never go to, but there had been obvious improvements in countries such as South Africa, Burkina Faso, Ghana and Mali.
Good government relationships are essential for doing business in Africa, Flory said. And that means having a working relationship right down to the village level because the people on the ground want to deal with decision-makers.