Into Africa

FORWARD PLANNING: Sultan Ahmed Bin Sulayem, chairman of Dubai World, is looking to Africa.

The company estimates its investment potential in these markets at around US$1bn in 2008.

"For metals it will be Africa and then Eastern Europe," says Koneru.

RMMI has already invested about US$250m in the Democratic Republic of Congo. It has taken 50% stakes in two companies holding vast copper mines and invested in a third project to establish a copper and cobalt smelter plant.

Demand for commodities such as copper, nickel, zinc and industrial minerals such as coal, and iron ore may double in the next 25 years. Copper prices have been moving in the range of US$6400 to US$7000 a tonne in the last year - three times higher than their average level through the 1990s and well above levels achieved in the early part of this decade.

In the case of coal, analysts forecast that the prices of coking coal - used as feedstock for the steel industry - may jump by 49% in 2008. Within Africa's Gulf contingent of investors, Dubai World is one of the largest players. It has plans to invest US$1.5bn across the continent over the next five years.

"We are a diversified company, with ports, logistics, and real estate and so we found value for us being there, in South Africa especially. We look at opportunities," says Bin Sulayem.

DP World and its Dubai World affiliates are already involved in some 30 projects across the continent.

DP World, which has port projects in Djibouti, Senegal and Mozambique, has been recently considering further projects including the building of container terminals in new locations such as South Africa. In 1999 DP World signed a 20-year management contract for a terminal in Djibouti, with the government of Djibouti as a joint-venture partner. Since its initial investment, Dubai World has invested more than US$1.1 bn in Djibouti.

In January this year, Dubai World's Jafza International subsidiary signed an US$800m deal to build a new terminal at the port at Dakar, Senegal. Not yet satisfied, Dubai World is also partnering with the Senegal government in a multi-billion dollar development of its trade and transportation infrastructure.

For Saudi billionaire Prince Alwaleed, Africa represents an investment opportunity that has been overlooked because of people's perceptions. "There is an opportunity that people are not seeing," he says. "There is a syndrome. Some African countries are not very stable - maybe two or three. But unfortunately people in the world amalgamate the whole African continent with one incident or one problem."

Among Prince Alwaleed's investments is the Pan-African Investment Partners II fund, dedicated to investing US$500m throughout the continent.

If Bin Sulayem and Prince Alwaleed are ahead of the game, the rest of pack is playing catch-up pretty fast.

Millennium Finance, a unit of Dubai Islamic Bank, is advising Ivory Coast's Groupe Atlantique on the sale of a stake in its Banque Atlantique unit and Atlantique Telecom with several Middle Eastern companies understood to be eyeing the assets.

The Millennium Group is also setting up a US$1bn fund that is Sharia-compliant to invest in industries across Africa, including telecoms, real estate and mining. It is believed that six similar funds, focused on Africa and the Middle East, are in the pipeline. Diplomatic ties are also strengthening between Gulf and African states, a possible precursor to increased investment from the region. The presidents of Mauritania and Sudan, both countries seeking to attract Middle East capital amid tightening global credit conditions, visited the UAE on official state business last week.

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