Ahead of the Investing in African Mining Indaba that took place last week in Cape Town, South Africa, Adam Foley, Managing Director of Australian company Chikale Resources, responded to several questions on Chikale Resources’ interests in Malawi’s Mzimba and Mwanza districts. The company will commence initial sampling in the next couple of months.
What are the opportunities and challenges facing exploration companies in Sub-Saharan Africa and in Malawi, in particular?
There main challenge at present is raising funds for exploration. It’s a very costly, high risk exercise and in the present economic environment the projects that seem to be funded are low risk JORC proven gold resources in Western Australia.
I would say the opportunities in Malawi are the fact that the resource industry is relatively new and undiscovered which gives a small company like Chikale a chance to get something going because in the case of Western Australia only the larger companies have the chance to explore and extract minerals. This is largely to do with the cost of exploration, it’s more advantageous to a smaller company because of the significant cost savings but the projects are deemed to be high risk. It’s a trade off, lower cost, high risk (and hopefully) high reward in Malawi versus higher cost, low risk and high reward in Western Australia.
As with most governments around the globe, when it comes to mining there is a lot of red tape which can cause costly delays. Process could be streamlined and access to information being improved.
The most important opportunity and the number 1 driver for exploring in Malawi is because I believe Chikale Resources could help make a difference to the people of Malawi. I spent a lot of time in Malawi in 1997 and again in 2001 and named my company after Chikale Beach in Nkhata Bay. I want to share my experience and expertise of the resource industry in Western Australia, especially when it comes to working with indigenous people and traditional land owners to help create a healthy, prosperous environment.
What are your expectations for the Indaba? What do you perceive as the role of the Indaba in Africa’s mining sector?
The Indaba is a fantastic forum to promote your mining project and meet people who are interested in investing in the region. This will be my first year at the Indaba and I have lined up meetings with people that I would never normally get to see which is absolutely invaluable for a company like mine. The Indaba has a fantastic reputation for being a serious place to showcase your company and to meet people who are serious about mining in Africa. I expect to meet more people involved with investing in exploration projects like mine and also companies who can provide mining services to Chikale Resources.
I perceive the role of the Indaba to bring together the complete African mining community, to help share expertise and provide support to one another and above all, use the mining industry to help improve living standards throughout Africa.
What should countries like Malawi do to improve investment (or entrepreneurship) in the mining sector, particularly in exploration?
As someone who is working hard and spending a lot of money toward exploration in Malawi, I would like to feel that the government recognises this and can work toward streamlining their processes and be accountable for supplying information in a timely fashion. In this economic environment, time delays are very costly and raising money is very difficult which can make potential investors and company owners think twice about investing large sums of money in the country.