MINING INDABA
p.
With the energy transition, commodities needed in the
electricity sector are receiving a lot of focus; copper is
certainly the one commodity where, in the last
two to three years, we have seen a lot of
development happening. Canadian-listed
First Quantum opened their big new
mine in Latin America, and before
that, there was a lot of focus on
Zambia and the Democratic
Republic of the Congo (DRC).
Unfortunately, the DRC
and Zambia are both
experiencing a lot of
regulatory uncertainty. For
example, changes in their
taxes and mining royalties
have created an increased
cost base which could be a
deterrent for future investment.
The African mining outlook is commodity dependent. The
different commodities have different dynamics. At the
moment gold is doing well, therefore there is a lot of interest
in exploration and development in West Africa
where Africa has a lot of gold. So, countries like Ghana,
Mali and Burkina Faso are getting good attention with
developments happening.
s i n d u s tr y g r o u
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Andries, which commodities and countries in Africa should
we be looking out for in 2020?
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nd
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Andries Rossouw, audit partner at PwC, also
responsible for heading up the African energy,
utilities and resources industry group, looks at the
African mining outlook for 2020.
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adding additional focus on interaction with communities
by mining companies. Mining companies in the past could
negotiate with the leader of a community, now they need
to negotiate and engage with individual affected members
of the community.
What are the main challenges you foresee for mining
companies operating in Africa in 2020?
Companies investing in Africa are often frightened away
from investing in exploration in Africa because
of the potential long-term uncertainty, and
political uncertainty. We unfortunately
have a history of very volatile
political regimes in several mining
jurisdictions across the continent.
" The one thing
about mining is that
you can only mine where
there are resources. Africa
is blessed with fantastic
resources.
South Africa is going through the
same uncertainties. The finalisation
of the mining charter has created
both certainty and some uncertainty. The
Minerals Council went to court to get clarity on,
amongst others, what happens when existing mining
rights are renewed after the initial period. Something else
that has created a bit of uncertainty in our environment is
the Xolobeni case and the Bakgatla case, with both cases
Socio-economic factors in
Africa also play a big role.
Interruptions to mining
operations are not only as a
result of industrial relations,
but communities around
these mines are closing down
the operations for variance
grievances. The stakeholder
engagement in Africa is
absolutely key if you want to make
a success of your mining investment.
I do think that mining companies
understand the importance of investing
in their local communities when they invest
in Africa. Things have certainly changed from what
they were 50 years ago.
Infrastructure constraints is still a big issue in Africa. I think
electricity cost and security of supply in South Africa has
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