Sudbury area suppliers are beginning to make inroads into Africa, but the extent of the continent’s potential as a significant market is still uncertain.
North Bay’s J.S. Redpath is doing contract mining at Barrick Gold’s Bulyanhulu gold mine in Tanzania and Cambrian College is working in Egypt and South Africa to assist with the development of mining schools. Sudbury software developer Century Systems Technologies Inc. has penetrated the African market with its mine geology applications and RDH Mining Equipment of Alban recently completed the sale of a longhole drill to a mining contractor in Zambia.
The recent Electra Mining trade show in Johannesburg, South Africa, attracted only a handful of Ontario companies, including Cambrian College, RDH Mining Equipment, Mobile Parts Inc. and Mansour Mining, but there was a steady stream of visitors at the Ontario booth with solution or equipment oriented inquires, said Doug Nadorozny, general manager of growth and development for the City of Greater Sudbury.
“It was a busy show,” he said. “I was surprised at how many people walked right up to the booth and asked specifically about one of our companies.
It was a real eye-opener. We participated in the Ontario mission to get a better sense of the opportunities in South Africa and to help support the Sudbury mining sector as it becomes more export oriented and globally focused.”
In addition to promoting opportunities for Sudbury area suppliers, City officials also fielded inquiries from South African companies interested in Canadian representation.
Black Economic Empowerment is driving a lot of decision-making in the country as mining companies comply with quotas and milestones related to ownership, purchasing and employment equity.
Black Economic Empowerment supply companies may have an edge as a result, “but it’s a big market, so even a small piece of it can still be a lucrative business opportunity,” said Nadorozny.
The Johannesburg show was a first for RDH Mining Equipment. Company president Rick Lemieux said South Africa will be a challenge because of the different mining equipment that is used in the country’s underground mines. “It’s all low profile, smaller and more specialized,” he said.
“Time will tell. We met a lot of good people. It’s a start.”
Bob Morin, president of Mobile Parts, was more optimistic.
“It was an excellent show – very fruitful,” he said. “We went there looking for agents to distribute our products and we were successful. In fact, we have already received our first order.”
Mobile Parts manufactures and distributes components for a wide variety of underground machines and does business around the world. It competes on price by purchasing in volume from OEMs and generic parts manufacturers, boasts a large inventory and offers quick turnaround on orders.
“South Africa wasn’t an established market for us, but now we have good contacts in South Africa, Zambia and Botswana,” said Morin.
Geography and the strong Canadian dollar pose a challenge for Ontario mining supply companies interested in doing business in Africa, but there are a number of compelling reasons for giving the African mining market serious consideration, said Wayne Floreani, who has worked in economic development and trade promotion for the City of Sudbury and the South Africa trade office in Canada.
“Most significantly, the mining industry in Africa is huge, exploration and development are booming and Canadian junior mining companies and engineering firms are at the forefront,” said Floreani. “As Canadian companies, they are familiar with the strength of Canadian suppliers and their products and services and would have a natural affinity towards purchasing from them.”
There are also opportunities for trade going the other way.
South Africa is known for expertise in ground control, ventilation and hoisting, noted Floreani. “So in addition to selling to the South African mining market, there are opportunities for Ontario companies to source innovative South African products for sale within Canada.”