OPERATIONS •
SA JUNIOR MINING AND EXPLORATION
– KEY TO UNLOCKING ECONOMIC GROWTH ?
By Sharyn Macnamara
Untapped South African mineral reserves offer great potential opportunities for the junior mining sector , which could be a major future contributor to the country ’ s sorely needed economic growth and job creation , if only ‘ the powers that be ’ would create the required environment to attract investors .
This has been the message for some time now in our industry , and yet the wheels are turning at an astoundingly slow pace to address the widely - known and discussed concerns . Sharyn Macnamara caught up with the Junior and Emerging Miner ’ s Desk at the Minerals Council South Africa and the Junior Mining Association , one year down the line after the article ‘ Junior Mining : What will it take to develop at a faster pace in Africa ’ was published , to see what developments had taken place since . 1
The Minerals Council South Africa liaises proactively with government on a continual basis on many levels across the board when it comes to mining matters , and without their constant intervention , pressure and guidance – to be quite honest – who knows where we would be ? Of the organisation ’ s almost 80 members , 37 are juniors and the majority of these members are producers rather than explorers in the junior space . Three of these members are in fact associations – the Clay Brick Association of Southern Africa ( which includes quarries ), ASPASA ( representing the surface mining industry ) and the South African Diamond Producers Organisation ( SADPO ). Together these three associations represent over 1 000 individual smaller mining companies in total . The Junior and Emerging Miners ’ Desk therefore represents a powerful voice for the developing mining sector of South Africa .
SA junior ’ s production on the up “ In 2022 junior miners generated R88-billion in revenue , up from R54-billion in 2018 . While some of this increase can be attributed to inflation and intermittent high commodity prices over the four years , proportionally the junior sector output has increased more than that of the overall mining industry during this period ,” says Grant Mitchell , who heads up the Junior and Emerging Miners Desk at the Minerals Council . He points out that this growth has shown itself particularly in an upsurge of new members active in coal , PGMs and chrome , with some movement in copper too . Overall , iron-ore has also seen growth in the country .
These stats show the potential and the strength of this sector , which ultimately could contribute more meaningfully to the economy , if supported and empowered more substantially by the powers that be . Also consider the number of junior operations and the direct and indirect employment opportunities they offer . 2
The challenge still lies in exploration “ We must distinguish between the explorer juniors and producers ,” says Mitchell . Although our South African junior producers are performing well overall – especially considering South African environmental impediments such as power and rail constraints ,
Minerals Council South Africa security and illegal mining as well as funding challenges – our junior explorer numbers are dwindling as the country is losing out on available global exploration dollars .
Another strong voice in the mining industry seeking to assist this vital sector is the Junior Mining Association in South Africa ( JMA ). Martin Venter – a senior attorney , notary , conveyancer and solicitor of England and Wales and co-founder and director of the JMA acting on its executive committee – notes that the perceivable lack of leadership in the country and the allegations of corruption across the board have cost South Africa dearly when it comes to investor attraction and trust . The association has become actively involved in assisting juniors to combat crime and illegal mining – with the help of the official authorities , again another factor that sways investors away from the South African reality .
Last year , S & P Global stats showed that South Africa ’ s portion of exploration dollars has reduced from 5 % to less than 0.8 % since 2004 – again , a trend that has been publicised for a while now . In 2021 , South Africa ’ s Exploration Plan , published by the Department of Mineral Resources and Energy ( DMRE ) had set a firm target to attract 5 % of global exploration spend by 2024 , but two years on the country ’ s share has reduced rather than grown . 3
Investment interest in Africa was made clear at the Investing in Africa Mining Indaba 2023 – it is just moving north of South Africa , as our environment is simply not conducive to investment . “ The countries that are attracting the most exploration dollars in Africa are Democratic Republic of the Congo , Mali , Côte d ' Ivoire , Botswana
1 2
Junior Mining Association in South Africa
1 . Grant Mitchell heads up the Junior and Emerging Miners ' Desk at the Minerals Council .
2 . Martin Venter senior attorney , notary , conveyancer and solicitor of England and Wales and co-founder , director and executive committee member of the Junior Mining Association in South Africa .
www . africanmining . co . za African Mining Publication African Mining African Mining • June 2023 • 15