East Africa’s extractives industry is expected to slow down as investors delay capital expenditure due to weak commodity prices.
Mining companies in the region will cut back or delay investing as commodity prices are expected to remain low due to anticipated weak global demand and tightening of financial conditions.
The Kenya Fluorspar Company suspended mining and processing operations from April 30, due to depressed prices and increased operating costs that saw the firm return losses in three consecutive years.
Fluorspar’s traditional benchmark price for freight on board of $440 per tonne in mid-2012 dropped to between $300 and $280 from 2013 to mid-2015 as global demand softened and to less than $260 from January.
The World Bank has downgraded the 2016 economic growth rate of sub-Saharan Africa to 2.5 per cent from last year’s three per cent due to low commodity prices, weak global trade and diminishing capital flows.
“This sluggish growth underscores why it is important for countries to pursue policies that boost economic growth and improve the lives of those living in extreme poverty,” said World Bank Group president Jim Yong Kim.Global commodities demand and prices were driven by unprecedented Chinese growth from the year 2000. China can no longer be relied […]