australian companies are now the third largest

AUSTRALIAN companies are now the third-largest spenders on minerals exploration in Africa, pumping in more than $US160 million in 2006, according to the Australian Government's Export Finance and Insurance Corporation.



EFIC's chief economist Roger Donnelly said the risk of investing in many African nations is falling, with many countries deemed safer to invest in now than they were 10 years ago and better than many nations outside of Africa.

Donnelly was speaking at the 2007 Paydirt Africa Downunder Conference in Perth last week, on the topic of "Africa is not a country: the patchwork of risk facing investors".

Donnelly said there were several factors driving the minerals boom in Africa, with foreign direct investment inflows sharply increasing to about 3% of the global sum.

The most obvious factor behind the investment push is commodity price hikes and the resolution of many of the conflicts that have plagued nations in the past.

But Donnelly said there were other aspects, such as companies strategically positioning themselves to take advantage of the emerging market for African resources and the far less reported factor of a "global glut in savings".