The pace of iron-ore exploration and project development across Africa will depend largely on future price levels, which, in turn, are influenced by global supply and demand dynamics, according to professional services firm Deloitte Africa technical mining advisory leader Stewart Nupen.

“Exploration trends differ sharply between South Africa and the rest of Africa. In South Africa, particularly in the Northern Cape, iron-ore operations such as Sishen, Kolomela and Assmang are very well explored,” he explains.

However, Nupen points out that exploration in South Africa is largely of the “stay-in-business” type aimed at maintaining mining production of an established mine rather than discovering new resources that result in greenfield mines.

“Known magnetite projects exist but would require higher prices to develop,” he says.

Unlocking these resources, explains Nupen, would depend on commodity economics and price support rather than significant policy shifts, with magnetite profitability remaining supply-and-demand dependent albeit profitable with minimal additional infrastructure investment.

In contrast, iron-ore exploration in the rest of Africa is seeing renewed momentum, with activity reported across Mauritania, Guinea, Gabon, Namibia, Liberia, the Central African Republic, Nigeria and the Republic of Congo, where Nupen says both early- and late-stage projects are emerging.

“Globally, exploration has historically been dominated by Australia, but Africa is increasingly drawing attention as majors seek to expand the iron-ore resource base,” he highlights.

Differing Development

According to Nupen, South Africa and the rest of Africa represent “quite different” iron-ore markets.

The South African market is fairly mature, with well-established infrastructure and long-standing operations such as the Sishen–Saldanha iron-ore rail line, which has been operational since the 1970s and was upgraded to 60-million tonnes a year in the early 2000s and then to 93-million tonnes a year, notes Deloitte Africa sustainability leader Simon van Wyk.



Further, with discussions around the South African iron-ore sector focusing on logistics and infrastructure, particularly the performance of State-owned freight and logistics company Transnet, Van Wyk says the recent improvements in Transnet’s results showing volumes starting to recover, both for coal and iron-ore, are encouraging.

However, operational improvements on the Sishen-Saldanha line are marginal, as most upgrades have already been completed, he notes.

The remaining risks to South Africa’s iron-ore export potential include physical materials handling constraints, such as singular conveyor-to-ship loaders limiting export capacity, community pressures from Bluewater Bay residents and air quality challenges linked to ferrous dust, which pose ongoing operational licence risks under the Air Emission Licence administered by the Department of Forestry, Fisheries and the Environment.



Broader View

Meanwhile, across the rest of Africa, Van Wyk says many large iron-ore deposits have historically remained undeveloped as a result of most of these deposits being located far from export hubs, with ports and rail infrastructure capable of handling bulk materials often absent.

“Capital-intensive projects also face significant delays due to permitting, political influence, social impact and the sheer scale of investment required,” he adds.

However, Nupen says recent developments suggest a shift in this dynamic, with major cross-border projects unlocking previously stranded resources.