KEY POINTS
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Appian plans to invest about $2 billion in Africa.
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Policy uncertainty is pushing some mining capital towards Latin America.
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Morocco, Namibia and Botswana are among Appian’s preferred African jurisdictions.
Appian Capital Advisory plans to invest about $2 billion in Africa as part of a global investment programme worth between $5 billion and $7 billion over the next 12 to 24 months. However, the mining investment firm says unpredictable government policies are making some African markets less attractive to investors.
Appian CEO Michael Scherb said the London-based private equity firm was preparing to deploy the capital globally but warned that policy uncertainty was pushing investment towards Latin America.
African governments have introduced changes to mining laws, increased royalties and demanded greater local participation in the sector. The measures are intended to help countries secure a larger share of the wealth generated from their mineral resources.
However, Scherb said these changes could discourage investors when they create uncertainty over the financial and regulatory conditions under which mining projects operate.
“The geology doesn’t change, but government policy does,” Scherb told Reuters on Tuesday.
He added that withdrawing from a mining investment could be expensive for companies, but governments also risk losing revenue and development opportunities when investors move their capital elsewhere.
Latin America has generally maintained more stable tax and permitting arrangements, although countries such as Chile, Peru and Mexico have also pursued policies aimed at increasing national control over their natural resources.
Appian reviews opportunities across Africa
Appian currently has three active investments in Africa and has exited three others. Its previous exits include projects in Burkina Faso and Tanzania, amid a coup and an election crisis, respectively. The company has four active investments in Latin America, mainly in Brazil.
Despite the challenges, Scherb identified Morocco, Namibia and Botswana as top-tier mining jurisdictions. Appian is also evaluating opportunities in Ghana, Ivory Coast, Mauritania and Senegal.
The company invests in gold, copper, zinc, rare earths and other critical minerals. Its planned African investment allocation could provide opportunities for countries able to offer attractive projects and a stable operating environment.
Scherb said African governments could attract a greater share of global mining capital by simplifying approval processes and making policies more predictable.
Copper remains a key investment target
Appian remains optimistic about copper, which is increasingly important to the global energy transition and expanding digital infrastructure.
Scherb expects supply growth to struggle to keep pace with demand driven by electrification, artificial intelligence, data centres and the expansion of electricity grids.
These trends are increasing the importance of copper in power infrastructure and technology systems, potentially creating opportunities for mining companies capable of developing new sources of supply.
African countries with copper deposits and other critical mineral resources could benefit from this demand, provided their regulatory and fiscal arrangements give investors sufficient confidence to commit funding.
Governments urged to provide greater certainty
Appian’s investment plans underline the competition among resource-rich countries to attract private capital for mining exploration and development.
Scherb said the money was available, but governments needed to establish the conditions required to secure it. Predictable policies, efficient permitting and stable fiscal frameworks could help African countries compete more effectively with other mining regions.
The challenge for governments is to balance their desire for greater domestic benefits from mineral wealth with the need to maintain an investment environment that supports long-term projects.
