MINING INDABA
It is believed that more than 30% of the world’s global
mineral reserves are found in Africa. Thus, mining remains
one of the most significant industries on the continent and
contributes substantially to many of the countries’ foreign
exchange earnings, government revenues, employment and
gross domestic product and presents significant investment
opportunities. African mineral reserves rank high in minerals
such as bauxite, cobalt, diamonds, phosphate rocks, platinum
group metals (PGMSs), vermiculite, zirconium and vanadium.
What challenges are companies mining in Africa likely to face
in 2020?
In the past five years or so, African mines have navigated a
commodity price downturn, increased input costs, significant
changes in the regulatory frameworks and policies and
unpredictable international politics. Regulatory shifts in the
form of nationalism, taxation amendments and a drive for
increased benefit for the state and surrounding communities
in mining outputs have presented a need for African mining
companies to give careful consideration on how to navigate the
compliance landscape.
Attracting and retaining foreign capital in the mining sector is
critical. The emergence of the fourth industrial revolution has
presented new opportunities and challenges for the sector,
where careful consideration needs to be given to new skills,
adoption of new technologies and agile organisation structure
in order to efficiently operate in this environment. Other
challenges include undeveloped infrastructure, particularly
for getting minerals to markets; currency volatility
coupled with, in some jurisdictions, currency
controls; illegal mining; and managing
the expectations of local communities.
However, we are positive that
progress is being made in many
African countries.
What would you say makes
the African mining landscape
different from the rest of the
world?
Africa has a richer resource
endowment than any other
continent. Building and
maintaining cross-continental
business relationships will be
essential for Africa’s sustainable
economic growth. Mining companies
www. africanmining.co.za
tu
or
Fortune, what are your thoughts about the African mining
industry?
Fortune Mojapelo, CEO at Bushveld Minerals
and mining entrepreneur, discusses building
and maintaining cross-continental business
relationships essential to Africa’s sustainable
economic growth.
PROJECTS
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play an important role in finding development solutions in the
countries in which they operate.
Does the African mining landscape make it conducive for
junior miners to thrive?
Junior miners have particular needs, like access to exploration
deposits and financing. There are challenges in finding historical
data, securing licences and raising finance. Regulations need
to be reviewed to accommodate the investment aspiration of
junior miners and reduce the barriers they already face. South
Africa’s junior miners are even more acutely affected than
the bigger companies by ongoing political and regulatory
uncertainty and recent ratings downgrades.
We are encouraged by the efforts by the Department of
Minerals and Energy in South Africa where they have recently
launched a ‘junior miners’ programme’ to provide opportunities
for new entrants identified throughout the mining value chain,
as well as assist with issues such as access to funding, and
compliance and access to markets.
Looking at the year 2020 in particular, what changes need to
take place within African mining companies to improve the
industry as a whole?
The mining industry still presents substantial economic growth
opportunities for Africa if we can harness the value chain
opportunities associated with the emerging future industries
such as energy storage. We suggest that by embracing the
downstream opportunities associated with commodities in
which Africa has a distinctive advantage, Africa can significantly
improve mining’s contribution to its GDP. African mining
companies need to invest in infrastructure and technology
that will not disrupt but enhance labour relations.
"African mining
companies need to
invest in infrastructure
and technology that will
not disrupt but enhance
labour relations.
African Mining Publication
African mining companies have a role to play
in creating certainty – it does not only rest
on government. There is a need to be
more solutions-driven and identify ways
to contribute to systematic changes
in various parts of the continent. With
the evolving regulatory environment,
mining companies would need
to adopt shared value principles
in a manner that moves beyond
compliance, and enables increased
socio-economic impact, improved
business and operational efficiencies, and
sharing of value within a mine’s operating
ecosystem. As mining companies, we have an
important role to fulfil in the economic growth
and development of this continent.
African Mining
African Mining January 2020
37