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Sierra Leone And Ivory Coast To Overtake South Africa Within Decade In Terms Of Growth

Sierra Leone And Ivory Coast To Overtake South Africa Within Decade In Terms Of Growth

From News Time Africa

The frontier markets of Western Africa have the most promise for uncorrelated long-term potential of all sub-Saharan Africa. Having covered the larger countries of this region — Nigeria and Ghana — I want to now take a deeper dive into those countries less familiar to many investors, Sierra Leone and The Ivory Coast (Côte d’Ivoire).

As hard as it may be to imagine, I believe these countries, collectively and individually, will overtake South Africa in the next five to 10 years in terms of growth.

Sierra Leone, a country of six million, experienced GDP growth of roughly 15 percent in 2012 and again in 2013. Like many African countries, this growth was driven by the mining sector. Iron-ore production contributed to the country’s GDP growth from 6 percent in 2011 to current levels, which are expected to continue as iron-ore projects become fully operational.

African Minerals AMLZF +2.09 percent  owns 80 percent of the Tonkolili project, having sold 16.5 percent share of it to China’s Tianjin Minerals and Equipment Group (private). Previously, AMI received a large investment from China’s Shandong Iron & Steel Group . With these investments, the company will expand Tonkolili from 20 million metric tons per year to 35 million of open-pit production. For comparison, the Carajas Mine in Brazil, the world’s largest iron-ore mine, produces over 300 million metric tons of ore.

China is a huge investor in Sierra Leone. According to the country’s Ministry of Mines and Mineral Resources, China’s Kingho Energy Group Co., Ltd (private) will spend more than $6 billion in the development of mineral resources there. These projects include the construction of a railway and a deep-water port.

China isn’t the only investor in Sierra Leone. London Mining UK:LOND -3.52 percent owns 100 percent of Sierra Leone’s Marampa mine, a working iron-ore facility (mine, power plant and processing plant) with an estimated 40-year lifespan, according to the company. Currently it is producing 5.4 million metric tons per year.

Written by Peter Kohli/Read more at News Time Africa