JOHANNESBURG (miningweekly.com) – Africa – the new treasure trove of the world – in conjunction with China, would become the centre of the world's trade, Frank Gregory, the MD of Johannesburg-based advisory firm The Mineral Corporation, said on Tuesday.

Africa has many mineral resource-led opportunities and has been dubbed the new frontier with an estimated 21% of its gross domestic product (GDP) sourced from the mining sector, compared with the rest of the world's 4.3%.

Discussing the top factors impacting on mining in Africa at the Junior Mining and Exploration Conference, in Johannesburg, he said that with China's continuing urbanisation rate of 20-million to 30-million people a year and resultant stimulation of demand, Africa stood to benefit with China as a new player on the resource-rich continent.

Gregory said that China had a current financial reserve of $2.5-trillion.

However, South Africa, the fifth-largest mining country in the world with an 18% mining-sourced GDP, had "fallen out of favour".

The country, which Gregory believed was ignoring the "13 rules of investment", had been upstaged by many competing countries in terms of mining growth, dropping 2.5% in the period from 2001 to 2008, owing to its handling of its resource development.

Investment Solutions chief strategist Chris Hart cited South Africa’s 2001 efforts to transform the mining industry as being counterproductive.

He noted that, while transformation was a necessity, the measures taken to ensure transformation had "gotten in the way" of the actual transformation in the sector.

The country's current "woes", which included talk of nationalisation, policy and regulation uncertainty and labour disruptions, further stunted South Africa's potential resource growth.

Government, labour and business should collaborate and "become friends", to mitigate the country's challenges and capitalise, along with the rest of the continent, on Asia's growing economic growth, Gregory commented.

SGB Securities mining equities and commodity analyst Justin Froneman suggested a review of the regulatory and policy environment to improve investor sentiment, adding that uncertainty, as well as labour issues and related productivity, were contributing factors in investment exit.

Africa has been indicated to hold most of the world's commodities, including up to 80% of the world's gold resources.