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Secure supply, efficiency needed for mining growth

An important focus of this year’s Investing in African Mining Indaba will be on security and supply –and with good reason, according to Ralf Hennecke, Managing Director of Omnia Group company BME.

The pressure is building for the mining sector to re-set its production capability in the face of growing future demand – especially in those minerals critical to global decarbonisation trends. Not only will this require more exploration and mine development in the long term, but it will demand more predictability and efficiency across the value chain.

“The coming year will continue to bring challenges with regards to mining supply chains around the world,” said Hennecke. “These obstacles have their origins in the economic lockdowns during the Covid-19 pandemic but have been compounded by the Russian invasion of Ukraine and the related disruptions.”

This has brought home the importance of secure supply chains in key inputs like explosives and blasting technology, on which mines rely to meet their daily output targets. PwC’s annual insight report SA Mine 2022 has also recently raised similar concerns about whether South Africa and other resource-rich countries will benefit fully from mineral demand growth. This will depend, argued PwC, on their ability to address bottlenecks in supply and mine-to-market infrastructure.

“As BME, we are always dealing with supply chain disruptions – caused by a range of factors from weak infrastructure to border efficiency,” he said. “Our success in serving customers stems from ongoing investment in local infrastructure and skills, to strengthen local supply chains.”

Closer collaboration between mines and their supply partners was a key ingredient in building future stability in the sector, he asserted. Beyond supply chain issues, the pursuit of efficiency in mining remained a vital theme. This is because efficiency is directly relevant to energy saving efforts for decarbonisation, as well as for unlocking opportunities to gradually increase production levels.

“The digital age offers mining supply companies the ability to continuously develop our productive technologies,” he said. “In our field – blasting and explosives – we have seen the significant impact that our technological development can have on mine safety and productivity, for instance.”

Hennecke highlighted that these efficiency improvements were important to the long-term sustainability of the sector – as they improved the commercial viability and longevity of every project. Greenfield projects to produce key commodities are scarce, he pointed out, and minerals like nickel, copper, cobalt and platinum group metals are likely to experience supply shortages if new projects are not initiated soon.

“It has become clear that more exploration – in battery minerals particularly – is going to be necessary to meet the needs of a lower carbon global economy,” he said. “Being a high-risk endeavour, exploration needs optimal levels of confidence from the investment sector – so every efficiency gain will help.”

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