There was a renewed sense of a positivity for the future of South African mining at the Joburg Indaba this year, despite ongoing impediments to more rapid growth and investment.
According to SRK Consulting (South Africa) partner and principal mining engineer Marcin Wertz, the constrained present day operating environment of mining made way for discussions on the future of the sector including ‘new’ minerals. There was also talk about the next generation of leaders, new players, increased beneficiation of the continent’s mineral wealth, and the role of technology in advancing the safety and productivity of the sector.
“While the price of gold soared, industry players were having talks around attracting investment to excavate the wider range of minerals with which South Africa is endowed,” said Wertz. He added that the country has rich deposits of many of the raw materials required in new technologies and industries, including the automotive sector, healthcare, green energies and the hydrogen economy.
Further, Bernard Swanepoel, chairman of the Joburg Indaba, says South Africa should fully maximise its mineral resources.
However there are concerns around South Africa falling behind in global competitiveness – during two decades with almost no exploration – centred around the usual suspects of high input costs including electricity, continued policy uncertainty, failing infrastructure, and administrative delays.
“Policy uncertainty remains the biggest challenge to this country’s mining sector,” said Wertz. “In such a capital-intensive industry, investors need to know that their billions of rands are being well spent and that they will see a return on their investment in the future.”
Although progress in the establishment of a new mining cadastre should see results in the real time accessibility of data on mining areas and applications, Wertz expressed disappointment at the lack of clarity on the status of permitting given by Minister of Mineral and Petroleum Resources Gwede Mantashe. With a renewed focus on mining in the US, this can take only a matter of weeks there, and in the meantime, South Africa is missing out on investment opportunities.
High praise
Nevertheless, the minister had words of praise for this year’s Joburg Indaba, saying that the mining sector was the most transformed in South Africa. Mantashe also lauded the spirit of engagement and collaboration which was very much in evidence at this 13th edition of the Indaba.
Wertz pointed out that the increased interest in critical minerals and the surge in the gold price were among the developments in the sector that possibly resulted in increased attendance this year.
“This meant that many more industry voices were heard,” he explained. “After two days of critical conversations about the state of the industry, the tone of the minister’s closing remarks was also the most encouraging in some years.”
Welcome investment in exploration
While the surge in the price of gold and a 35% increase in the value of platinum-group metals (PGMs) this year mean there is more money available for investment in existing operations, it is exploration that is much needed.
“South Africa is one of the most underexplored regions in the world, and urgently needs to make up for lost time,” Wertz said.
The announcement by Anglo American (soon to be Anglo Teck) at the Indaba that it is investing R600 million into a junior mining exploration fund, and the Public Investment Corporation’s injection of R1.35 billion into early-stage mining projects, at least 50% of which is designated for South Africa, were therefore applauded at the event.
Despite its importance for the economy and employment in this country, mining still only represents 6% of the country’s GDP, so the scope for growth is clear.
“A key takeaway from the Joburg Indaba is that we remain cautiously optimistic for the mining industry,” said Wertz. “We believe that it can contribute more to the country, but if the sector is to remain relevant and prosperous, we need coordinated action to resolve ongoing issues and to forge a path into the future.”
