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@LeonLouw3
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A
fter attending the Junior
Mining Indaba in Johannesburg
recently and speaking to several
miners, geologists, financial experts,
and investors, there was no doubt in
my mind that they will only invest in
countries where there is regulatory
certainty and political stability. Investors
are not overly enthusiastic to fund
grassroots exploration projects even
in the best mining destinations in the
world, at the best of times, so to expect
them to change their ways and invest
in projects in jurisdictions where there
is no transparency, uncertainty, and a
trust deficit, is a big ask. South Africa
is one of those countries. Geologically
speaking, South Africa is a treasure
trove, but the regulatory and political
uncertainty hampers investment.
Even with recent positive political
change, the risk of sinking money into
new shafts is just too high. Labour
demands, corruption, high input costs,
bureaucracy, and doubts about land
issues and regulations are smothering
the development of greenfields projects.
The lack of new exploration projects
in South Africa is of big concern.
The majors have not been investing
in exploration for at least the past five
to ten years, and new junior mining
companies target only the gold,
diamond, manganese, and coal sectors.
South Africa has huge reserves of
other commodities like tin, vanadium,
andalusite, fluorspar, iron ore, and
copper, to name only a few. Moreover,
there are hundreds of derelict mines
waiting to be revitalised. In addition,
South Africa’s geology is well mapped.
The big problem seems to be funding
and, of course, the stifling political and
regulatory environment mentioned
earlier. Therefore, government’s pledge
to join forces with the Industrial
Development Corporation (IDC) to
introduce a fund for junior mining and
exploration companies is encouraging;
however, its benefits will only become
palpable when the risk constraints are
ironed out.
Yet, South African juniors, geologists,
and entrepreneurs should not only
consider South African projects. There
are unbelievable opportunities in Africa
north of the Limpopo. If it is difficult
to get projects off the ground in South
Africa, why not start exploring the rest
of Africa? There are huge deposits out
there. Best of all, they are untouched.
Zimbabwe, the DRC, Zambia, Namibia,
Nigeria, Angola, and the whole of West
Africa should be on each and every
South African junior miner’s map.
Bernard Swanepoel and his team have
once again done a fantastic job with
@JuniorIndaba and hopefully we have
an even bigger turnout next year.
Leon
Editor
AUGUST 2018 MINING MIRROR
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