Resumen de Mines and Money 2015: : Financiers urged to have patience with mining investments
"I think we are seeing a resizing across all of the industries," [Joe Wickwire] added, noting that the necessary shrinkage of the supply side had been delayed by currency movements. The effect of the strong US dollar against weaker local currencies had been to "keep the undead alive", he explained, meaning that many unviable mining projects that should have been forced to close have been kept in production.
[Ross Harvey] said that companies had to be honest about the political risks associated with African developments. "From a government perspective, it is difficult to invest in a transparent way," he said, noting that major and listed mining companies have more reputational constraints and are subject to greater scrutiny than smaller or private businesses. Public companies can see their assets "flipped from under them" if they have not taken steps to manage the risk in advance, Harvey said.
Ludivine Wouters, managing partner at London-based investment and advisory firm, Latitude Five, said that not all African governments should be tarred with the same risk brush but agreed that there was a general lack of flexibility in the way African governments handle their mining sectors. "Investors are very particular about how risks are managed," she said, noting that what used to be "box ticking" exercises for resources companies are now areas that have to be given special care and attention to satisfy potential partners.
