sharyn @ interactmedia . co . za
Sharyn Macnamara – Senior writer •
Mining ’ s innovative responses to a wave of global and local crises
INTRODUCTION
As we bid adieu to 2023 , uncertainty reigns in the global mining sector in quarter four of an already extremely challenging year . 1 The resilience of mining companies all over the world will once again be tested , and the ability to find opportunity in crisis , together with cost containment strategies will play an important role in survival in the coming months . This is precisely where we hope that our 12th issue of African Mining , incorporating Mining Mirror will come into play .
Uncertainty in context S & P captured the state of global economies in the September quarter of 2023 noting , “ policy announcements and the release of economic indicators continued to drive metals price volatility globally . Industrial metals market participants faced contrasting outlooks for key economies , with uncertainty over demand from China and Europe tempered by outperformance in the US . Towards the end of the quarter , the strength of the US jobs market contributed to the US Federal Reserve ' s hawkish commentary following September ' s interest rate pause , noting that higher-for-longer interest rates might be required to reduce inflation . Bearish market sentiment quickly emerged , leading to a sharp retreat for gold prices and increased concerns that metals demand could underperform in 2024 , should the higher interest rates persist longer than previously forecast . The first weeks of the December quarter brought further global uncertainty with the outbreak of the Israeli war with Hamas in Gaza .” 2
Meanwhile , locally in South Africa , the Joburg Indaba 2023 in October highlighted some of the ways in which mining houses in the country have dealt with the severe commodity price slumps and the resultant margin squeeze exacerbated by inflation and additional increases in interest rates . “ Cost containment ‘ the morning after ’” was the theme of a session moderated by Nompumelelo Makhoba , CFO Fraser Alexander – with Meroonisha Kerber , CFO Impala Platinum ; Charl Keyter , CFO Sibanye-Stillwater ; Bothwell Mazarura CFO Kumba Iron Ore and Tsundzukani Mhlanga FD , African Rainbow Minerals all weighing in with their experience and strategies in the wake of the crises .
On the day , I chatted to Mzila Mthenjane , CEO of Minerals Council South Africa who drilled down into some of the detail on the response actions shared by the mining houses to keep businesses sustainable and relevant in an economy plagued by the recent severely affected global macro environment and additional local challenges . He summarised the conversation saying that cost performance was considered in the light of the additional local constraints and challenges on the power , logistics and crime front . Although cost containment would usually mean an immediate reduction of head count – this was noted as a last resort for stakeholders . Instead , mining ’ s innovative approaches included looking at the largest components of operational cost – one being energy . The result was motivation for solar projects that would reduce both electricity costs and at the same time reduce scope 2 emissions for the operations . Consumables within the supply chain were the second target of cost reduction strategy resulting in between 5 and 10 % cost savings .
Mthenjane said that the discipline of cost containment should prevail , during times when prices are both high and low , so that the benefits can sustain and grow operations as well as reward shareholders and create capital for ESG ( environmental , social and governance ) investments . This is key to sustainability in the future .
On that point , we at African Mining thank all of our partners , advertisers and readers for their continued support in 2023 and wish you all the best in the year to come . We hope that the African Mining Suppliers Directory 2024 will be our valued readers ’ tool to assist cost containment efforts while riding this wave through 2024 – offering contacts and solution providers to help manage budgets .
Listen to what Mthenjane had to say here : https :// www . linkedin . com / posts / african-mining-publication _ joburgindaba-finance-sustainabilityactivity-7115995267098681344-pEz3 ? utm _ source = share & utm _ medium = member _ android
Sharyn Macnamara
References : 1 . At the time of writing in November 2023 2 . S & P Global Market Intelligence : “ State of the Market : Mining Q3 ' 23 ” sector outlook
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Consumables within the supply chain were the second target of cost reduction strategy resulting in between 5 and 10 % cost savings .
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