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Press ReleaseFrontier Strategy Group Managing Director Alex Gorbansky Discusses the Unique Challenges of Operating in Africa and what Companies will Need to do to Succeed in 2007 at the World Mining Congress in London CAMBRIDGE, Mass. – (BUSINESS WIRE) – May 15, 2007 – Frontier Strategy Group Managing Director and Africa expert Alex Gorbansky served as the Chair and Moderator of the "Investing in Africa" Regional Symposium at the World Mining Congress in London on May 15, 2007. In his opening remarks at the Symposium to a panel of investors and senior executives from mining companies, Mr. Gorbansky stated that, "today there is no more important region of the world for the growth of the mining industry than Africa due to both declining reserves in many of the more mature markets and worsening conditions in Latin America and the Former Soviet Union." Mr. Gorbansky noted several of the key features that make Africa a unique and challenging place for investing and operating, including: Africa's post-colonial history; poor governance and a shifting geopolitical landscape; cost inflation - the myth of Africa being a cheap place to operate is dead; the level of poverty and tribal factionalism means that companies must grapple with unique social challenges and high expectations; security issues are major particularly in post-conflict zones such as the DRC but also in countries such as Nigeria; and there are significant challenges around labor and availability of infrastructure such as roads and power, meaning higher than expected costs. The combination of these factors, Mr. Gorbansky stated, means that "at the end of the day, companies' expectations for projects are often unrealistic and in reality many projects take a longer time to complete and are more expensive." Mr. Gorbansky stressed that "management teams and investors must pay special to attention to ensure that projects have sufficient geological potential to justify the risk in the increasing operational complexity of Africa." Mr. Gorbansky went on to introduce participating members of the panel from senior executive positions at mining companies successfully operating in African countries. He highlighted the success that Randgold Resources has enjoyed because it is one of the few independent African firms that has managed to execute from exploration to production and build a strong mid-size producing asset base. Mr. Gorbansky concluded his opening remarks by stating that the "next generation of success stories will require novel approaches and must account for the transformation changes happening in Africa mining." In order to be successful, firms will need to: manage increasing competition from firms based in China, India, and Russia; respond to rising social expectations and the threat of resource nationalism; maintain a razor-sharp focus on cost containment; concentrate on developing and hiring Africans into senior management positions; and identify new opportunities from a combination of geological potential and countries in transition. About Alex GorbanskyAlex Gorbansky is a Managing Director at Frontier Strategy Group and heads the Africa Mining & Energy practice at the Frontier Strategy Group. About Frontier Strategy GroupFrontier Strategy Group is a for-profit think tank committed to helping senior executives and their organizations succeed in emerging markets. The firm collaborates with its partner companies to identify innovative and proven strategies across industries and geographies for navigating the changing terrain of the world's most dynamic markets. The firm is based in Washington, DC, and has offices in Cambridge, Los Angeles, and New York.
For a copy of the presentation please contact Alexis Horowitz-Burdick. Media Contact:
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