MINING IN FOCUS
are working alongside established operations, the challenge has always
been how to define a junior or emerging miner. According to the Minerals
Council of South Africa’s Junior and Emerging Miners’ Desk Research
Report, the term junior mining has taken on a broad meaning to include, in
addition to exploration companies, mid-tier producers. “Emerging miners”
are defined as being indigenous to South Africa and are typically smaller
companies involved in the early phases of mining exploration or in the early
developmental stage.
The Department of Mineral Resources (DMR) defines junior and emerging
miners as companies with a R150-million yearly turnover, while the Minerals
Council incorporates a spectrum of emerging miners including family-run
artisanal miners to sophisticated operations with an annual turnover of
R500- million. According to Mitchell, DMR’s definition unfortunately only
benefits the smallest companies, binding the vast majority of junior mining
companies to stipulations that they may not be able to meet.
The junior mining sector in South Africa was born in 2006 as result of the
‘use it or lose it’ principle enforced in the Mining and Petroleum Resource
Development Act (MPRDA) of 2006. According to the MPRDA, mining rights
not being used to exploit minerals in the ground by large mining companies,
would revert back to the state. Although this resulted in a steady growth of
juniors, the uptake has been disappointingly slow. “Historically, only seven
large companies were represented by the South African Chamber of Mines
(today the Minerals Council). The Aggregate and Sand Producers Association
of Southern African (Aspasa), who represented the quarrying sector, also
had a seat on the board. Today, the Minerals Council represents 80 members
in total. Twenty-four of those are junior mining companies represented by
the Junior and Emerging Miners’ Leadership Forum. The forum further also
represents the Claybrick Association of South Africa and the South African
Diamond Producers Organisation (SADPO). Together they represent more
than 200 small companies, Mitchell tells African Mining.
Diamond miners on the decrease
One sector where junior miners were once in
abundance is the alluvial mining industry and
small kimberlite (dykes and small pipes or
‘blows’). Unfortunately, their number have
been decimated as a result of adverse
policy and regulations, and a ‘one-size-
fits-all’ mine health and safety policy
challenges. Apart from a perception
of stability, the revised Mining
Charter III and its predecessors,
has not been kind to junior mining
companies, especially the highly
mobile diamond miners.
Independent consultant John Bristow, who has an intimate knowledge of
the diamond industry, tells African Mining that there were more than
2 000 small diamond operators in the country before 2004. “Today, we think
there are between 150 and 180 alluvial diamond miners left, which is a real
tragedy,” says Bristow and points out that SADPO is currently supporting an
independent study by the AEON Department at Nelson Mandela University
to document and better understand the role of the Small or Junior diamond
miners . “To debate these issues and make government aware of the
problems are key if we are going to grow and improve the junior mining
sector. It is such an important industry, and SADPO members and other
small miners can play a substantial role in provinces like the North West,
Northern Cape (including the depressed north-west coast of Namaqualand),
and Free State, where poverty and unemployment are creating huge social
problems. Every digger that employs 15 or 20 people is a real positive, and
keeps people of the streets,” Bristow adds.
Illegal mining is also expanding rapidly in practically every sector of the
industry, including gold, coal, diamonds, chrome, and sand, among others.
Though this is not to be encouraged, it is a reality driven by poverty,
syndicates, and big business, such that government and the DMR have,
in places, sought to try and formalise it. It is important though, not to
encourage illegal mining and to make a distinction between small scale or
emerging miners, and artisanal or illegal miners. Unregulated, illegal mining
has the opposite effect of creating a thriving junior sector, as it drains the
economy and creates endless environmental and social challenges and does
not contribute to the national fiscus.
According to Alex Khumalo head: social performance at the
Minerals Council, small scale miners typically don’t have
a mining right but will be in possession of a mining
permit. “An artisanal miner is an illegal miner
and doesn’t have the right to mine. There are
very few examples of where illegal miners
acquire permits. Being an illegal miner
has benefits. For one you do not have
to comply with regulations, and you
do not have to pay anything. What
you extract from the ground doesn’t
have to be known and you are able
to market your product through
illegal channels,” says Khumalo.
"Illegal mining has the
opposite effect of creating a
thriving junior sector, as it drains
the economy and creates endless
environmental and social
challenges.
Bristow says there are added
challenges for small diamond
miners exploiting ultra-low grade,
high quality gem diamond deposits.
These miners follow the diamonds
along ancient elevated river terraces,
which means that small operators can
end up moving their operating sites in
According to Amo Marengwa,
an alluvial diamond miner in the
Northern Cape, lengthy delays in
securing mining permits and water
licences, onerous and inappropriate
regulatory requirements, lack of funding
for entrepreneurs, and a Mining Charter
and implementation guidelines which are impractical for small operators,
are just some of the problems that confront start-up and existing alluvial
diamond miners. Marengwa is a member of SADPO who has attempted to
highlight the diversity of the junior mining sector and the challenges of the
‘one-size-fits-all’ approach to minerals policy by regulators.
According to many, government has failed to nurture a strong junior mining sector. In picture is a junior mining
operation on the West Rand of Johannesburg, which is now in business rescue.
www. africanmining.co.za
African Mining Publication
African Mining
African Mining September 2019
31