3. Potential tools to encourage extractives sector investment
In all jurisdictions, there are some essential factors to consider from a practical perspective to ensure that investment promotion efforts are well coordinated:
- The various options for organising governmental resources to make the investment promotion function effective – this aspect is dealt with in more detail in section 4.
- The need to develop and implement a communications and marketing strategy in relation to the extractives sector. Such a strategy should ensure that consistent communications messages are developed, drawing on evidence and data to back the claims made on a country’s suitability for investment.
- The resources that potential investors require should be easy to access. These will include easy access to legislation and regulatory requirements affecting extractives companies, minimising and facilitating the search process for companies. Access to key government decision makers is also useful, as investors may need to seek assurances relating to certain legal, regulatory and political risks associated with a long-term investment.
International investor conferences
Several international investor conferences provide a forum where investors can engage with government representatives and other authorities to gain a better perspective of potential investment opportunities.
In the mining sector, these include events such as:
The Cape Town Mining Indaba, typically held in February each year and which brings together investors, civil society representatives, the financial sector, government and industry to discuss key issues and opportunities in the mining sector, primarily in Africa.
The Prospectors and Developers Association of Canada (PDAC) Convention, held in March each year in Canada, which is regarded as a premier industry event and industry forum.
Africa Down Under. This conference, now in its 15th year, was created to raise awareness of Australia’s interests in African mining and energy. It includes in-depth discussions involving experts in the fields of security on the continent, infrastructure and project financing and provides a vibrant, inclusive forum for discussion, networking and deal making, while raising awareness of the resources opportunities on offer throughout Africa.
In the base metals industry, the London Metals Exchange (LME) Seminar and LME week is an important venue for exchanging market information and discussion of market trends and issues.
In the petroleum sector, these include events such as:
Africa Oil Week, typically attended by Africa’s governments, national oil companies, licensing agencies and corporate oil/gas players, this five-day annual conference provides senior-level executive insights on opportunities for tradable acreage for securing new venture assets and finance/investment deals and explores Africa’s changing upstream landscape, super-majors and independents from around the world engaged in Africa.
The World Petroleum Congress, known as the "Olympics" of the petroleum industry, is a triennial Congress covering all aspects of the industry from technological advances in upstream and downstream operations to the role of natural gas and renewables, management of the industry and its social, economic and environmental impact.
Oil and Gas IP Summit, is the only event in the world dedicated to the development of intellectual property strategy within the oil and gas industry.
Governments seeking investment need to adopt a coordinated approach to attending events such as these, ensuring that they secure governmental speakers to represent them at the appropriate level and with the appropriate authority to speak on key issues relating to the sector. Presentations should be undertaken on the basis the communications strategy that has been adopted for the industry, in a way that provides assurance to investors that their concerns will be heard and appropriate action taken.
Ensuring governance at all stages of the value chain
Many of the key factors that affect investment decisions are however by investor perceptions of political, regulatory and legislative stability at all stages of the value chain of the industry.
According to the Natural Resource Governance Institute (NRGI), the overall governance of any extractive industry is determined by examining each stage of its value chain. Hence any serious investor must factor its unique nature in every metal or jurisdiction it intends to invest in. The value chain traces the path of the resource wealth to the market and towards overall sustainable development.
Value chain for the extractive Industry (Source: NRGI charter)