Even Australian miners know how costly it is to build projects in the native land. So rather than risk it in Australia at this time of dropping commodity prices, might as well build a project portfolio elsewhere in the world where administrative and construction costs are low to ensure higher profit return. And Africa could just be the answer to that.
Although the dangers of investing in Africa are arguably high, what with much of the region controlled by rebel groups who either steal the already processed minerals and sell it or blackmail the miners to fund their fight, Australian miners still presumably see a rainbow at the clearing to risk putting their business there.
Africa's main attraction is its low employment costs. Since it is hard to maintain jobs in Africa given its political dilemma, African nationals would be more than glad to acquire and be able to maintain jobs, never mind if the wages are minimal.
In South Africa, a rock drill operator, one of the most demanding jobs in the mines, earns only R120,000 or A$13,800 a year. That could translate to potential savings for Australian miners.
To date, about 200 Australian mining companies are present in Africa doing more than 650 projects across 37 countries, including Discovery Metals which is already starting a copper mine in Botswana, Sundance Resources which has iron ore operations in Cameroon and the Congo, and Paladin Energy with its uranium mine in Namibia and another in Malawi.
With the apparent cross-over of mining investments, mine workers in Australia may do have to live within their financial means as jobs could trickle down in the native land and get transferred anytime elsewhere in other parts of the globe.
Deutsche Bank had earlier said Australia, recession-free for 21 years, could slip into one next year.
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