Competing despite the continents logistical challenges A mining - PowerPoint PPT Presentation

Competing despite the continent’s logistical challenges A mining sector perspective Ivan Thuynsma Global Head of Mining Damco

Agenda 1 Current logistics challenges 2 Infrastructure projects 3 Africa development framework 4 Current & Future port projects 5 Things to consider for future infrastructure projects 6 Closing remarks 7 Q&A 1 September 18, 2014

Current logistics challenges ● Imbalance in trade flows ● Huge increase in road traffic (negative impact) as a result of lack of rail infrastructure ● Limited port terminals (mining) ● Port congestions ● Limited collaboration between parties ● Political influences & agenda’s ● Bureaucratic administration / customs processes (red tape) 2 September 18, 2014

Side stepping the challenges Containerization of mining commodities Multi modal solutions ● Lack of adequate port terminals ● Lack of bulk rail equipment ● Balance of trade volumes ● Lack of bulk port handling ● Reduction is shipping costs ● Reduced investment costs ● Increased shipping frequency ● Half Height Containers / Rotatable spreaders ● Examples: ● Examples: ● Tanzania / South Africa ● Mauritania / South Africa There is need for The above are not purpose build long-term solutions infrastructure 3 September 18, 2014

Current infrastructure projects in SADC [1/2] The recent Regional Infrastructure Development Master Plan (RIDMP) that was published by the SADC community, highlighted the following : SADC RIDMP Transport Projects per Country Graph illustrating the nr of projects in the Transport Sector relevant to each SADC country. More than one country can participate in the same project. There are a total of 222 projects in the Transport Sector. 80 68 67 Number of projects 70 58 60 53 51 49 50 44 43 41 40 37 40 32 28 27 26 30 20 10 0 Country Regional Infrastructure Development Master Plan, Executive Summary, August 2012, http://www.ridmp-gis.org/sadectabs.asp?VERSION=&CORRIDOR=SADEC&TRANS=# 4 September 18, 2014

Current infrastructure projects in SADC [2/2] ● There is a widening gap in the provision of infrastructure in the surface transport subsector across the region ● While roads have somewhat improved in most countries, railway lines have seen minimal improvement ● Transit traffic for landlocked SADC will increase from 13 million tonnes in 2009 to 50 million tonnes by 2030 and 148 million by 2040 , at an average annual growth rate of 8.2% ● Total port traffic in Southern Africa will jump from 92 million tonnes in 2009 to 500 million tonnes by 2027 ● Current projects for additional container terminals will most likely only provide adequate container capacity until 2020; planning for further expansion and/or a new port should commence now 5 September 18, 2014

Africa’s economical development framework Source: ECDPM 6 September 18, 2014

Some of the current port developments in Africa [1/3] • Luma Port Kenya $24 billion corridor project LAPSSET (Luma Port, • $ 500 million port project (China) South Sudan, Ethiopia) 7 September 18, 2014

Some of the current port developments in Africa [2/3] • Dar Es Salaam Port upgrade (7 berths) $ 200 million • Bagamoyo Port – Tanzania $ 11 billion (China) 8 September 18, 2014

Some of the current port developments in Africa [3/3] Durban Dig-out-port • South Africa $ 10 billion Old Durban Airport 9 September 18, 2014

Future port developments Conakry Port, Guinea – Rio Tinto ● $1 billion ● Location: South along the coastline from Conakry ● Capacity: Vessels of up to 250,000 (DWT) Grand Butu Point, Liberia – Putu Iron Ore (Severstal) ● Buchanan iron ore terminal ● Limited information available Kribi Port, Cameroon – Sundance resources ● Deep water port ● Phase 1 of construction started ● Capacity: Vessels of up to 300,000 (DWT) Pointe Noire, Congo – Zanaga / Mayoko (Glencore / Exxaro) ● Due diligence study completed in April 2013 ● Exxaro failed to reach agreement with government regarding required rail & port development 10 September 18, 2014

Things to consider for future infrastructure developments ● Historically port have been Ocean carrier strategies incubators for economic growth Trade flows ● Single user vs. Multi user ports Corridor developments ● Economies of scale ● Better collaboration between ● Danger of single user ports countries and government ● Rio Tinto Madagascar ● (One) Proper platform to develop ● Logistics network integration infrastructure with participation of private & public sectors ● Port ● Private sector will need to contribute ● Rail to infrastructure funding ● Road ● Locate new ports outside of cities ● Waterway (Europe & USA) ● Financing of infrastructure projects ● East vs. West ● Macro economic impact of financing conditions 11 September 18, 2014

Closing remarks ● Better collaboration between countries and government; and private sector. ● Proper platform(s) to develop infrastructure with participation of private & public sectors. ● Private sector will need to contribute to infrastructure funding to promote economic growth 12 September 18, 2014

THANK YOU