History has provided us with various gold rushes across the globe and it seems that it is now the turn of West Africa to claim the mantle of the fastest-growing region in the mining industry.
Hampered by political volatility, demanding infrastructure and difficult weather conditions, the region, which stretches from Mauritania in the North West through to Nigeria in the South East has witnessed a dramatic increase in mining activity over the past 10 years. Countries such as Senegal, Côte d'Ivoire and Ghana (which recently overtook South Africa as the largest gold producer on the continent) have seen the number of mines more than double during that period, positioning them as three of the fastest-growing economies in the world.
This rush has been particularly prominent for the exploration industry, where a number of junior companies and larger, production-focused mining groups have all increased their activity as they look to explore the largely undeveloped region.
Capital Drilling and other mining service providers are continuing to see a significant upturn in demand within the region, mainly driven by the over 500 mineral exploration projects and further 200 projects at production or assessment level. Capital Drilling has invested heavily within the region, taking our rig count from eight in 2016 to 31 today, accounting for over a third of our entire fleet.
The demand for rigs in the region is synonymous with other mining districts, with mid-tier producers requiring the right equipment for production, definition drilling and underground rigs. We are also seeing a strong upturn for diamond/exploration drilling, not only from junior miners but also from the more mature miners.
Beyond the recent surge in the price of gold, there are plenty of reasons why West Africa has become the hottest mineral district in the world - the region is a key source of a number of important minerals including the provision of almost a quarter of the world's titanium oxide, 11.5 per cent of global bauxite, and six per cent of uranium. Within the gold space itself, West Africa is prolific, not only in production, where it provides around 10 per cent of global production but also within the discovery of new resources. Over the past decade, the region has been the most active discovery destination globally, discovering over 79 million ounces of gold.
Though the region as a whole remains largely greenfield, most junior mining companies remain constrained by access to capital. At Capital Drilling, we have sought to overcome this particular challenge by offering our clients a strong value proposition by leveraging our strong balance sheet and regional knowledge and investing directly in our clients' growth.
By sharing the financial burden of drilling campaigns for our smaller clients, yet mitigating risk through our on-the-ground knowledge and due diligence, we have a unique opportunity to generate significant returns for both parties.
We believe that by providing the most modern fleet available to all customers they can leverage the high standards of our drilling services, improving their value, which in turn contributes to Capital Drilling's sustainable business model. In addition, our network in West Africa is backed up by our investment in our own infrastructure, providing high-quality servicing and maintenance operations from our strategic centres in Mauritania and Côte d'Ivoire. These facilities ensure our clients have timely access to key materials, spare parts and all the technical services needed to enhance drilling and reduce downtime.
The mining opportunity in West Africa provides an important lever to generate sustainable growth for these economies. This dynamic region already provides a substantial proportion of the key minerals which are fuelling global growth - and at Capital Drilling, we believe that the provision of world-class drilling services is the very first key to unlocking West Africa's enormous potential.
Brian Rudd is executive director and co-founder of Capital Drilling