for the skeptics

something i just read on the SMH business website. Not new info, but re-assuring never the less. I think Jury is smarter than you all think. And to all the whiners, SHUTUP ALREADY, im getting a headache from all you sooks so stick a sock in it and let these boys do their job already. If you dont like the way theyre handling things then BOO HOO, get out, simple...amateurs!!

anyway..


Global miners eye riches of the sub-Sahara
Jamie Freed
August 16, 2008

THERE'S a place where Australian miners are preparing to spend up to $US20billion to develop new projects - and no, it isn't Western Australia. It might surprise investors, but the hot new destination is sub-Saharan Africa.

"Something of a boom in Australian activity is on," Roger Donnelly, the chief economist of Australia's Export Finance & Insurance Corporation, said at the launch of a Lowy Institute paper on the issue this week. "All previous booms have passed Africa by. The investment climates have been too hard."

BHP Billiton and Rio Tinto are leading the way. The global miners have a combined $US6.1billion invested in operating mines in the region and are looking to spend billions more on projects such as Rio's $US6billion Simandou iron ore project in Guinea and BHP's proposed $US3billion aluminium smelter in the Democratic Republic of Congo.

Rio has cited the great prospects for the Simandou project, which could eventually produce 170 million tonnes of iron ore a year, as evidence that BHP's hostile takeover bid is too low. It has spent $US300 million evaluating the project but earlier this month Guinea's president revoked the mining concession, returning it to an exploration lease.

"That an iron ore deposit in a remote corner of Guinea - a remote country most Australians would have difficulty finding on the map - could influence the prospects for a takeover that would represent a major consolidation in the international mining industry was certainly a situation no one would have predicted five years ago," Mr Donnelly and co-author Benjamin Ford said in the Lowy Institute report.

The situation in Guinea has also highlighted the issue of sovereign risk in sub-Saharan Africa, where only Botswana, Mauritius, Namibia and South Africa have investment-grade credit ratings.

"[Simandou] is a serious situation," a Constellation Capital investment analyst, Peter Chilton, said. "It looks like they could have lost the whole thing. Even if they start negotiations [with the president], the sovereign risk you would have to say has gone up."

The Lowy Institute report noted Australia only maintained diplomatic posts in Commonwealth or former Commonwealth countries in Africa and lacked representation in many top mining investment destinations such as Guinea, Zambia and Mozambique.

It added aid programs by the Chinese Government, such as a $US9.25billion loan pledged to the Democratic Republic of Congo in return for access to resources, were making it tougher for some Western companies to remain competitive. But Mr Ford said it was still possible for smaller and mid-tier Australian miners to use African projects as a launching pad "to lift into the big leagues".