Invesco Canada blog

Insights, commentary and investing expertise

Norman MacDonald | March 27, 2014

Is South Africa a “gold mine”?

While it would be nice if the next deposits of copper, oil and gas were to crop up closer to home, the reality is many prolific resource zones are found offshore in places where  political and social unrest are commonplace. Some investment opportunities in Africa are a prime example of this, but it’s also a vast continent full of massive deposits, tremendous investment opportunities and well-run companies.

South Africa has a number of mining opportunities, but it also faces a huge challenge right now on the labour side of the industry. The country has gone through a massive shift in policy, and it’s entering a new age of entrepreneurialism. Because of that, you face a lot of labour unrest, which can make it a difficult place to do business.

I try to visit mine sites in Africa every couple of years or more, and last month I returned from a due diligence trip to South Africa and Zambia. The Democratic Republic of the Congo was also on my itinerary, but we were turned away at the border due to an uprising. South Africa was my first stop where I attended the African Mining Indaba, the world’s largest mining investment conference, in Cape Town.

Before arriving at the conference, I had done some research on a potential opportunity I wanted to learn more about as my feeling was it might make a worthy investment. To confirm or dispel my beliefs, I met with some South African investment managers at the conference. They spoke highly of the company I was investigating, which helped confirm my initial findings. It goes to show that prime investment opportunities aren’t typically found on your doorstep – you have to be willing to go that extra mile.

In my next post, I’ll speak to some of the opportunities and risks in Zambia.

Learn more about the Trimark Investments team.

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