Mining in focus
Exploration drilling in Botswana. Botswana has become a hotspot for early stage exploration, mostly
because of its business-friendly environment.
SA government
wants exploration
South Africa cannot afford to wait any longer for new exploration projects to come
online, writes Leon Louw.
B
etter late than never is how we
should feel about the South African
government’s new emphasis on
exploration.
Boasting that mining is a sunrise industry,
while beating it into submission at the same
time, has done the country a great disservice.
Failing to recognise that exploration is the only
way to revitalise an ailing sector in a constraint
economy, has further added to its woes.
It does seem, however, that the Department
of Mineral Resources (DMR), under a
competent Minister Gwede Mantashe, has
turned the corner.
At the Investing in Africa Mining Indaba,
held in Cape Town earlier this year, Mantashe
hinted that exploration companies might
be absolved from the 51% black ownership
requirements that his predecessor, Mosebenzi
[24] MINING MIRROR AUGUST 2019
Zwane, decreed without second thought. After
Zwane published his disastrous 2017 Charter,
exploration activities in South Africa dropped
to levels not seen in more than 50 years.
Mantashe has reiterated government’s
new commitment to focus on exploration at
numerous occasions since his enlightened
utterances in Cape Town, the latest being
at the annual Junior Mining Indaba, held in
Johannesburg in June 2019. There, Mantashe
called upon exploration companies to invest in
South Africa, and again said that prospecting
rights fell outside the obligations laid out
in the new Charter that he proclaimed in
September 2018.
Is it too late?
But, despite all Mantashe’s good intentions,
the damage might already be done.
Exploration, for one, is an extremely risky
undertaking, and if venture capitalists take
flight, they don’t return in a rush. Second,
prospecting is a long-term game. Developing a
greenfields mine can take anything from three
to 10 years. The question is whether South
Africa has the time to wait this long for new
projects to come online.
The one thing on its side though, is its
superior geology. South Africa has, without a
doubt, one of the best mineral endowments
in the world, explorers know that, and as the
saying goes, money follows a good ore body.
But global investors seem to have lost their risk
appetite, and even in countries like Australia
and Canada, junior exploration companies are
finding it difficult to raise money.
William Witham, CEO at Australia-
Africa Minerals and Energy Group, said at
www.miningmirror.co.za