South African fund manager PIC sees gold focus shifting to West Africa

West African countries will drive the next gold mining boom in Africa as the industry continues to decline in Southern Africa, according to the continent’s largest asset manager Public Investment Corporation (PIC).

Investor-friendly policies and low cost deposits in countries such as Ghana, Mali, Burkina Faso, Guinea and Côte d’Ivoire offer long-term investment potential, said PIC mining research analyst Lebohang Sekhokoane.

“When you look at the gold sector in West Africa, that’s where the sun is rising. We expect to see more opportunities from West Africa,” she said in an interview last week in Johannesburg.

In contrast, the maturing gold industry in South Africa, which has produced half the world’s bullion ever mined, offers shorter five to 10-year investment life spans. South African gold producers are facing escalating costs associated with operating some of the deepest mines in the world.

Several South Africa-based gold firms have begun to shift their production to lower cost operations in West Africa, including AngloGold Ashanti and Gold Fields. Both companies have expanded their operations in Ghana, which overtook South Africa to become the continent’s largest gold producer earlier this year.

PIC is a South African state-owned entity which oversees about US$150 billion of assets for more than 1.2 million state workers. The fund manager is yet to have any unlisted mining investments in Africa outside its home nation.