participate in accelerating the opportunities to build and grow with our people and .... responsive to the needs of our
Africa
Mining and metals sector
“This is an exciting time for Africa. The world is taking a stronger interest in the potential we have to offer. Our vision is to actively participate in accelerating the opportunities to build and grow with our people and clients. We are already operating as one integrated business across the continent. We are a truly African business.” Ajen Sita, CEO, EY Africa
Inside A sector poised for growth
1
EY in Africa
2
EY’s passion for the mining and metals sector
5
Our service offerings to the mining and metals sector
6
Key contacts
7
A sector poised for growth Known for its generous endowment of minerals and natural resources, the African continent accounts for nearly two thirds of the world’s mineral reserves, and more than half of the world’s mineral reserves for gold, platinum group metals, cobalt and diamonds.
Key resource
Units
Platinum
Africa produces more than 60 minerals, and is a major producer of gold, platinum group metals, diamonds, uranium, manganese, nickel, bauxite, cobalt and chromium. Furthermore, Africa also has among the largest reserves of uranium, manganese and chromium in the world. The table below summarises the top 10 resources in Africa.
African reserves
World reserves
% of world reserves
million oz
2,026
2,283
89
Diamonds
million ct
385
580
66
Cobalt
million t
3.7
6.6
56
Chromium
million t
130
350
37
Manganese
million t
182
540
34
Gold
million oz
257
1,511
16
Gas
trillion cubic feet
467
6,254
8
Crude oil
billion barrels
127
1,33
9
Coal
billion t
35
645
5
Copper
million t
27
540
4
Source: US Geological Survey Mineral Yearbook 2010; Edelweiss, BP
In terms of production, Africa produces more than 60 minerals, and is a major producer of gold, platinum group metals, diamonds, uranium, manganese, nickel, bauxite, cobalt and chromium. In contrast, Africa currently produces less than 7% of the world’s copper, lead and zinc, and less than 3% of the world’s iron ore and silver.
Wickus Botha Africa Mining and Metals Leader
During the past few years, exploration activities across the African continent have significantly increased, more than tripling since 2009.1
In 2012, more than 17% of global exploration costs were incurred in Africa. Of particular interest are the recent significant findings of copper, cobalt, thermal coal, metallurgical coal, iron ore, uranium, bauxite, gold and nickel deposits . Many of these findings have resulted in the development of new large-scale mining operations and the creation of many new jobs. Despite the recent slowdown in global economic growth and the stagnancy of infrastructure projects in developed markets, the continued demand for natural resources, particularly to support the development, urbanisation and industrialisation of emerging markets, has significantly intensified the focus and global importance of Africa’s mineral wealth.
Emerging markets, such as China and India, are investing heavily in Africa to secure supply of minerals, whereas mining companies from developed markets are investing in Africa in pursuit of diversifying their production portfolio and growth. These have resulted in significant amounts of foreign direct investment (FDI) and several mergers and acquisitions (M&A) in recent years. Doing business in Africa continues to be challenging, and careful consideration, robust planning, broad stakeholder engagement, strong leadership, and effective execution is required. Consistent with the results of EY’s Business risks facing mining and metals the most notable challenges facing the mining sector across Africa continues to be capital allocation and access to capital, margin protection and productivity improvement, resource nationalism, social license to operate, shortages of skilled resources, sharing the benefits and access to transport and utility infrastructure.2 At EY, we are passionate about the mining and metals industry, and optimistic about the abundance of opportunities presented across the African continent. Whether you are considering entering the African market, expanding or optimising your existing operations, or improving your governance, compliance or control environment, EY has the right people in the right places with the energy, enthusiasm, skills and experience to assist you in unlocking value.
1 “Worldwide exploration trends 2013: A Special Report from SNL Metals Economics Group for the PDAC International Convention,” Metals Economics Group, 2013. 2 “Business risks facing mining and metals 2013-2014,” EY, June 2013.
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Africa mining and metals sector
Resource sector (coal, oil and natural gas, metals and minerals) Breakdown by % contribution of economic activity as a proportional of total fDi new projects
78 projects
168 projects
19%
19%
103 projects
28%
80 projects
100 projects
31%
32%
60 projects
978 projects
22%
50% 26% 37%
26%
23% 29%
30%
27%
55% 49%
44%
52% 40%
38%
Services
23%
Manufacturing
Extraction
2007
2008
2009
2010
2011
2012
Sum 2003-12
Source: fDi Markets; EY analysis
EY in Africa Although the risks in investing in Africa may appear high, risks can be managed, and the rewards can be great. That is why we are investing in growing our integrated Africa presence and capacity to serve our clients who are also investing in and across the continent. EY currently operates seamlessly across Africa, with a physical presence in 33 countries. We operate under the direction of a single pan-African leadership. Our integrated representation across Africa has been described in the media as “one of the biggest changes in the accounting profession in more than 100 years.” We are able to navigate successfully through the complexity that our clients are experiencing across the geographies and the diversity of market sizes and sophistication. We do this through our Africa Business Center: its sole purpose is to assist clients in making their investment and expansion decisions in Africa. The Africa Business Center is supported by a network of professionals across Africa and in key investor markets such as Australia, Brazil, Canada, China, Europe,
India, the Middle East, the United Kingdom and United States. This network includes experienced sector professionals who are intimately familiar with opportunities and trends in their sector across the continent, as well as knowledge professionals whose research insights are invaluable in considering new markets.
Why we are excited about Africa? Africa is receiving unparalleled attention from large global companies, including substantial opportunities in mining. Africa is becoming increasingly more attractive to international investors and perceptions are becoming distinctly more positive over the medium to long term. Business leaders are planning new developments and expanding the existing investments that they have, supporting higher levels of foreign investment projected into the future. Most importantly, Africans themselves are leading the growth across the continent, and are displaying an overwhelming optimism about the growth prospects and investment potential of the continent.
Africa mining and metals sector
2
Over the next twenty years, one third of the total global population growth of 1,5bn people will take place in Africa, and more than seventy cities of over one million people will exist in the next ten years as a result of rapid urbanisation. The opportunities in Africa as an emerging market are unparalleled.
1
billion Africa’s population
17
54
11
sovereign states
African countries ahead of India on the World Bank’s Ease of Doing Business Index
$400
$2
36
trillion Africa’s collective GDP
African countries ahead of Russia on Transparency International’s Corruption Perception Index
billion South Africa’s Government proposed infrastructure program
71%
of all new FDI projects (3,848) attracted by Africa’s top 10 destinations since 2003
of the world’s fastest 20 growing economies through 2017 will be African
38 800+
60%
China-Africa proportion of BRICS trade (totalling $340 billion in 2012) with Africa
African countries ahead of China on the EIU’s Democracy Index
active infrastructure projects across different sectors in Africa, with a combined value in excess of $700 billion
22.3%
compound growth for Sub-Saharan Africa, and 12.8% for Africa in new FDI projects 2007-2012
Source: “Africa Attractiveness Survey 2013”, EY; “World Bank Ease of Doing Index 2013”, World Bank; “Corruption Perception Index 2013”, World Bank; “Economist Intelligence Unit Democracy Index 2013”.
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Africa mining and metals sector
An integrated African business We believe these are significant enhancers of the quality of service and speed of response that you will receive from us.
EY is an integrated organization across Africa, with a single leadership and a single set of goals, objectives and performance criteria. The significance for our clients is that we manage our business by service line, sectors and functions rather than by country, which means that our clients receive:
Geographically we have representation in most African countries, and our footprint across Africa helps ensure that communication is responsive to the needs of our clients, thereby stimulating trade and enhancing business relationships.
• Consistent quality standards everywhere • Utilization of a ‘single point of contact’ service
EY Africa by numbers
5,100
M or oc co
Tunisia
Algeria
Libya
1
East Region
North Africa Region
Ethiopia
South Sudan
staff
Egypt
integrated operating model
Uganda Kenya
Tanzania
33
163
countries
years in Africa
Tunisia
M or oc co
Central Region
Algeria
Malawi
Mauritania
Zimbabwe
Mali
Niger
Guinea
Djibouti
Sierra Leone Sao Tome Liberia Gabon Côte d’Ivoire Congo
Cameroon Democratic Republic of Congo
Eritrea
Nigeria South Benin Central African Sudan Cameroon Republic Togo
Equatorial Guinea
Chad
Sudan
Burkina Faso
Ghana
Senegal Gambia Guinea Bissau
Guinea Côte d’Ivoire
Chad
Democratic Republic of Congo Burundi
Uganda
Angola Mauritius
Mozambique Namibia
Tanzania
Botswana
Madagascar
Comoros Malawi
Zimbabwe
West Region
Seychelles
Seychelles
Rwanda
Zambia
Ghana
Somalia
Kenya
Angola
Nigeria
Southern Region
Ethiopia
Mad agas car
Cape Verde
Senegal
Gabon Congo
Egypt Zambia
FSSA Region
inea Equatorial Guinea
Libya
Namibia Botswana
South Africa
Mauritius
Reunion
Mozabique
263
5 regions
Swaziland South Africa
Lesotho
partners
1 African executive
Africa mining and metals sector
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EY’s passion for the mining and metals sector A truly globally connected professional services organization For many years, the mining and metals industry has been operating almost borderless, with executive management and the providers of capital often finding themselves far away from the actual mining operations. Furthermore, the mining industry is defined by unique and complex issues, and continuously evolving regulatory requirements. In recognizing the global nature of the industry, EY established the Global Mining and Metals Center, located in Sydney Australia, making it the hub of our mining knowledge and expertise. The Center is dedicated to offering industry insights and coordinating a network of more than 2,200 mining and metals professionals in 82 countries and 220 offices, who provide leading industry insights, develop practical alternatives and provide tailored solutions to the issues our clients face. The Center brings together a worldwide team of professionals with deep technical experience in providing assurance, tax, transaction and advisory services – its where people and ideas come together to help mining and metals companies meet the issues of today and anticipate those of tomorrow. Ultimately it enables us to help our clients meet their goals and compete more effectively. It’s how EY makes a difference.
Whether you are already active in multiple geographies or planning to expand your business into other countries, you can trust us to assemble a multinational team that combines deep industry knowledge, experience in the issues you face and strong local connections. Why choose EY’s Africa mining and metals team? EY is known for its deep mining and metals sector knowledge, relationships with the industry’s key stakeholders, and strong global capabilities. Clients see us as the most globally connected professional services organization, which, together with our industry focus and integrated leadership, truly set us apart. Across Africa, we provide our mining and metals clients with service teams that understand the challenges and complexities of their businesses, including the industry operating processes, growth drivers, regulatory considerations and market dynamics. We have an impressive footprint across Africa, with skilled and experienced professionals that really understand the jurisdictions and operating environments.
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It’s our experience that makes a difference to your business With a strong but volatile outlook for the sector, the global mining and metals industry is focused on future growth through expanded production, without losing sight of operational efficiency and cost optimization. The sector is also faced with the increased challenges of changing expectations in the maintenance of its social license to operate, skills shortages, effectively executing capital projects and meeting government revenue expectations. At EY we understand the key business drivers and challenges facing the mining and metals sector and believe our significant industry credentials set us apart. Our experience working with companies within the mining and metals sector means that we understand the issues, challenges and opportunities of your business and can provide you with deep insight into leading practices in assurance, tax, transactions and advisory services. You will also experience our interactive and collaborative working style as we provide you with a unique perspective – insights, observations and advice. Our people have a passion for serving the industry and the specific experience and knowledge to recognize, respond and work with our clients in delivering exceptional client service. We are committed to “building a better working world” across Africa • Working with our clients. Our 167,000 people are the foundation of our success. We assemble the right multi-disciplinary team for your business, drawing on our global network of professionals. Working with you in a collaborative style, we gain a clear understanding of your organization and strive to identify issues before they become problems. You get the people you need, wherever in the world you need them, backed up by leading practices, methodologies and tools. • Developing people. We attract talented people from diverse backgrounds. Our emphasis on inclusiveness matters more than ever today. As business challenges become more complex, we need to call upon the widest spectrum of views and opinions to address them. Our open culture offers continuous personal and professional development. Because when our people grow and succeed, your company benefits. • Strengthening communities. We help to improve regulatory regimes and company reporting models. We promote transparency in financial reporting and use our influence to strengthen global corporate governance. We encourage entrepreneurship, which leads to growth, jobs and prosperous communities. And our people share their business skills and knowledge with others in their communities.
Africa mining and metals sector
Our service offerings to the mining and metals sector Today, the origination of capital for mining activities flow from all over the world, including Africa, to acquire or fund the development of operations across Africa. Our collective expertise enable us to advise our clients in delivering value from its investments as well as managing the risks, reputation and performance of mining operations across Africa.
Services offered by EY
Advisory
Performance improvement
Tax
Business Tax Advisory
International Tax Services
• Finance
• Finance
• International Tax Services
• Customer
• Customer
• Transfer pricing
• IT Advisory
• IT Advisory
• Supply Chain
• Supply Chain
Risk • Actuarial services • Internal audit • Internal controls • Risk management
Compliance and Reporting • Accounting compliance and reporting • Global compliance and
• Payroll
management • IT programme advisory
Transaction Tax • Pre-deal structuring • Tax modelling and documentation
The above are packaged to deliver the following solutions
Infrastructure Advisory
Accounting Compliance and Reporting
Project Finance Financial Statement Audit
Indirect Tax • Value added tax (VAT)
Valuation and business modelling
Fraud Investigation and Dispute Services
• Customs and international trade
Financial Accounting and Advisory Services
Transaction integration
Human Capital Transaction real estate
Climate Change and Sustainability Services
• Global employment tax services
M&A Advisory
• Expatriate tax compliance
• IT transformation • IT assurance and risk
Assurance
Transaction support
reporting • Business Tax Compliance
IT risk and Assurance
Transactions
• Tax due diligence • Post deal implementation
services
Restructuring
• Business immigration services • Performance and Reward • Africa Tax Coordination Services (ATCS) • Relocation
• Governance, risk and compliance • Strategic program management • Financial administration reform • Infrastructure delivery management • Building the Engine Room of Growth in Africa • IT led transformation
Africa mining and metals sector
6
Key contacts At EY, we know that mining and metals industry credentials are critically important to our clients. We are proud of our local and global industry credentials and believe that the real power of a credential is the way that we leverage on our credentials to the benefit of the client. If you are interested in discussing our credentials in your region, please contact any of the representatives listed below.
Our mining and metals people At EY Africa our extensive base of experienced partners that operating within the mining and metals space provide us with the edge that our clients are looking for. Our mining and metals group operate across the continent as one, lead by our mining and metals sector leader Wickus Botha. Our team has deep industry experience and insights that we lever to provide real benefit to our clients. Whether you are already active in multiple geographies or planning to expand your business into other countries, you can trust us to assemble a multinational team that combines deep industry knowledge, experience in the issues you face and strong local connections.
Regional and in-country sector residents Region
Central
East
North
South
West
7
Country
Primary contact
Email
Telephone
Malawi
Shiraz Yusuf
[email protected]
+265 187 6476
Zambia
Henry Nondo
[email protected]
+260 211 232297
Zimbabwe
Nqaba Mkwananzi
[email protected]
+263 475 0979
Ethiopia
Amaha Bekele
[email protected]
+251 11 550 4933
Kenya
Joseph Cheboror
[email protected]
+254 20 271 5300
Uganda
Michael Kimoni
[email protected]
+256 414 343 520
Rwanda
Herbert Gatsinzi
[email protected]
+250 571 058
South Sudan
Patrick Kamau
[email protected]
+254 20 271 5300
Tanzania
Joseph Sheffu
[email protected]
+255 788 681 900
Egypt
Christian Mion
[email protected]
+33 6 86 42 25 77
Algeria
Philippe Ausseur
[email protected]
+ 33 146 93 77 30
Morocco
Patrick Montlahuc
[email protected]
+212 22 95 79 00
Libya
Christian Mion
[email protected]
+33 6 86 42 25 77
Tunisia
Christian Mion
[email protected]
+33 6 86 42 25 77
Angola
Luis Marques
[email protected]
+222 371 390
Botswana
Bakani Ndwapi
[email protected]
+267 397 4078
Madagascar
Yann Rasamoely
[email protected]
+248 20 22 217 96
Mauritius
Yann Rasmoely
[email protected]
+248 20 22 217 96
Mozambique
Gildo Come
[email protected]
+258 21 353 000
Namibia
Gerhard Fourie
[email protected]
+264 61 289 1100
Seychelles
Yann Rasmoely
[email protected]
+248 20 22 217 96
South Africa
Wickus Botha
[email protected]
+27 11 772 3386
Cameroon
Joseph Pagop Noupoue
[email protected]
+237 334 251 09
Chad
Erik Watremez
[email protected]
+241 74 21 68
Congo
Ludovic Ngatse
[email protected]
+242 05 530 03 50
Côte d’Ivoire
Jean-Francois Albrecht
[email protected]
+225 20 21 11 15
DR Congo
Lindsey Domingo
[email protected]
+243 999 306 869
Equatorial Guinea
Erik Watremez
[email protected]
+241 74 21 68
Gabon
Erik Watremez
[email protected]
+241 74 21 68
Ghana
Victor Gborglah
[email protected]
+233 302 77 42 75
Guinea
Joseph Pagop Noupoue
[email protected]
+237 334 251 09
Nigeria
Henry Egbiki
[email protected]
+234 1 269 5827
Senegal
Jean-Francois Albrecht
[email protected]
+225 20 21 11 15
Africa mining and metals sector
Africa mining and metals sector
8
EY’s Global Mining & Metals Center With a strong but volatile outlook for the sector, the global mining and metals sector is focused on future growth through expanded production, without losing sight of operational efficiency and cost optimization. The sector is also faced with the increased challenges of changing expectations in the maintenance of its social license to operate, skills shortages, effectively executing capital projects and meeting government revenue expectations. EY’s Global Mining & Metals Center brings together a worldwide team of professionals to help you succeed — a team with deep technical experience in providing assurance, tax, transactions and advisory services to the mining and metals sector. The Center is where people and ideas come together to help mining and metals companies meet the issues of today and anticipate those of tomorrow. Ultimately it enables us to help you meet your goals and compete more effectively.
Area contacts Global Mining & Metals Leader Mike Elliott Tel: +61 2 9248 4588
[email protected]
Commonwealth of Independent States Evgeni Khrustalev Tel: +7 495 648 9624
[email protected]
South America and Brazil Leader Carlos Assis Tel: +55 21 3263 7212
[email protected]
France and Luxemburg Christian Mion Tel: +33 1 46 93 65 47
[email protected]
Service line contacts Global Advisory Leader Paul Mitchell Tel: +86 21 2228 2300
[email protected]
India Anjani Agrawal Tel: +91 982 061 4141
[email protected]
Global Assurance Leader Tom Whelan Tel: +1 604 891 8381
[email protected]
United Kingdom & Ireland Lee Downham Tel: +44 20 7951 2178
[email protected]
Global IFRS Leader Tracey Waring Tel: +61 3 9288 8638
[email protected]
Europe, Middle East, India and Africa Leader Mick Bardella Tel: +44 20 7951 6486
[email protected]
Americas and United States Leader Andy Miller Tel: +1 314 290 1205
[email protected]
Global Tax Leader Andy Miller Tel: +1 314 290 1205
[email protected]
Africa Wickus Botha Tel: +27 11 772 3386
[email protected]
Canada Bruce Sprague Tel: +1 604 891 8415
[email protected]
Global Transactions Leader Lee Downham Tel: +44 20 7951 2178
[email protected]
Oceania Scott Grimley Tel: +61 3 9655 2509
[email protected] China and Mongolia Peter Markey Tel: +86 21 2228 2616
[email protected] Japan Andrew Cowell Tel: +81 3 3503 3435
[email protected]
EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. © 2013 EYGM Limited. All Rights Reserved Creative Services Ref. 121218. Artwork by Sewpersadh. EYG no. ER0089 ED no. 0114 This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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