Africa's largest money manager sees "significant investment opportunities" in gold mining in West Africa as industry in the southern tip of the continent shrinks.
Investor-friendly policies can help Ghana and other countries in the region achieve the next "gold boom," said Lebohang Sekhokoane, a mining survey analyst at Corp. Public Investment Corp. Côte d'Ivoire offers the long-term investment potential that the PIC prefers, not the five-decade life of projects in South Africa, she said.
"When you look at the gold sector in West Africa, the sun is rising there," Sehokoane said in an interview Wednesday in Johannesburg. "We expect to see more opportunities than West Africa."
The PIC, which oversees more than $ 150 billion in assets for more than 1.2 million state workers in South Africa, still has no investment in a continent-wide mining operation. The money manager can invest up to 5% of its assets in such unannounced African projects in all sectors.
"Opportunities exist and the focus shifts to other parts of the continent," Sehokoane said. "We obviously like to fund long-term projects."
South Africa's gold industry, which has produced half of the world's globes ever mined, is shrinking amid geological challenges in operating the world's deepest mines. AngloGold Ashanti Ltd. and Gold Fields Ltd. have outsourced production to lower-cost operations, including West Africa, with the first being in the process of selling its last underground mine in South Africa.
Both companies are expanding their production in Ghana, which leapfrogged South Africa to become the continent's largest bullion producer. Gold Fields said West African production jumped 25% in the first half, while AngloGold CEO Kelvin Dushniski called the Obuasi mine in Ghana a "growth engine".
Although the South African government has identified some regulatory issues, there is "little incentive" to invest in the country's gold mines, according to the PIC, which owns shares in both Johannesburg-based producers.
"The South African sector is mature," Sekhokoane said. "Compare this to new opportunities in West Africa, where operations are shallower, which facilitates mines and an investor-friendly environment."