The Coming Boom In India-Africa Mineral Investment

Business Monitor International (BMI) expects more Indian companies to venture overseas in the pursuit of copper, coal, and iron ore, as the economy experiences rapid growth and regulations restrict domestic investment opportunities. We expect Africa to become the key destination for Indian mineral sector investment as the continent is rich in high-grade untapped reserves.

We anticipate southern Africa to receive much of the interest from Indian companies seeking to plug India’s shortfall in coal and copper. Mozambique has some of the largest coal reserves due to come online in the next few years, and Botswana and Zambia have world-leading undeveloped resources of coal and copper. Furthermore, with the development of the ports of Durban in South Africa and Beira in Mozambique, the region will have substantial capacity to export coal directly to India. We also expect West Africa to receive substantial interest given the size of the region’s high-grade reserves and we forecast Indian steel consumption growth to average 6.8% over the next five years, whereas domestic iron ore production will rise by 5.1% over the same period.

One final reason that India will turn to Africa is uranium. India is seeking to significantly increase its nuclear power generation, and given its stringent domestic regulation, the country will look to invest in Namibia and Niger, which contain some of the largest uranium reserves in the world.

Our full article on Indian investment in Africa’s mineral sector is available to subscribers at Business Monitor Online.