EU Africa strategic Partnerships

Author: Tshepo Magagane

Firstly, I won’t fault the EU in Brussels (and in other cities), but agreements without Capital mean nothing!

I repeat, no fault on the EU side – they really get it!

But at the implementation level, there are huge problems—you still have too many people who view Africa through an 80s lens!

And when they wake up, it may just be too late!

Governments don’t deliver projects and offtake; people holding mining licenses and those Specialist Funds own those projects and offtake!

I recently spent almost a week with Kings from the South, Central, East, West, North Africa. Every single one wanted to monopolise my time, as “governments don’t have the capital, communities don’t have the capital, project owners don’t have the capital”!

I shall summarise the problem again: let us stop talking about more Conferences and yet another Paper and talk about “Access to Capital.” DFIs need to step up, or traditional LPs won’t make that move!

6. Financing Sources

• Merchant Banks – traditional source for risk unlocking mining projects – verdict: BII resulted in teams being disbanded

• Miners – they form part of the financing ecosystem by buying projects that are Tier 1 and already derisked – verdict: a small part of the solution.

• Industry / OEM will only consider offtake for Bankable Stage Project. The verdict is that it does not increase financing sources; it is just structuring flexibility at the Project Finance Stage.

• Trading Houses will only consider offtake for the Bankable Stage Project. The verdict is that it does not increase financing sources; it is just structuring flexibility at the Project Finance Stage.

• Specialist Funds – AuM just not sufficient (less than 5% focuses on Africa).

• Listed Equities are not suitable for risk-unlock mining projects.

Hence, there is a dire need for new Capital Pools (especially for Africa)