Baxter told the Mining Summit in Johannesburg that the majority of the three-billion people that would urbanise globally by 2050 would be Africans.
Moreover, even in the next 20 years, the foremost site of urbanisation would be Africa.
Africa was now the third-largest area of global expenditure on mining exploration and many African countries had gone through reform processes to attract mining investment.
In the next ten years, the so-called emerging-market Bric countries of Brazil, Russia, India, China and South Africa would be spending $22-trillion on infrastructure and, this year alone, the infrastructural expenditure of Bric and South Africa would be $1,2-trillion, which would continue to drive demand for copper, iron-ore, coal and other metals and minerals.
Metal stockpiles had fallen across the board resulting in the longest and biggest commodities boom since the post-Second World War period.
The global commodities boom had translated into many benefits for the global mining industry, enabling companies to reduce gearing ratios, improve return on capital employed, improve net profit rates and pay more taxes to governments.
What was interesting was that a turn was currently taking place of the gearing ratios of mining companies once again rising, more project funding being raised and more interest being paid on loans.
In South Africa alone, mining companies had paid R6-billion in interest to banks and exploration expenditures were 400% higher than during the trough of 2002.
There had been an exploration shift away from majors to small juniors, which currently accounted for one half of exploration expenditure, but which stood to be hard hit by the credit crunch.
China’s 12% of gross domestic product (GDP) on infrastructure compared with Britain’s 5% of GDP at the height of the industrial revolution in the eighteenth century, which was illustrative of the scale of the infrastructural boom in response to “massive urbanisation and massive industrialisation”.
Baxter said that an “awfully large” number of houses and buildings would have to be built to accommodate the 1,4-billion people who would be urbanised in the next 20 years.
Taking place simultaneously was a synchronised industrialisation process.
China alone would account for nearly one half of all infrastructural expenditure to accommodate the movement of 15-million people a year out of rural communities into the urban centres, stimulating the absorption of “huge amounts” of copper, aluminium, iron-ore and coal.
China in 2000 overtook Japan as the world’s largest steel producer and was now producing nearly four times as much steel as Japan produced in eight years, with most of the Chinese steel used locally.
China had more than quadrupled the amount of electricity generated, building and commissioning one and a half Eskom equivalents a year.