MINING INDABA 2018
The Investing in Africa Mining Indaba 2018 took place from 5 to 8 February under the theme‘ Providing the foundation for sustainable junior and major mining growth in Africa’, and set the stage for mining companies, investors, governments and media to make valuable connections, learn from experts and gain industry insight.
Andrew van Zyl, partner and principal consultant at SRK Consulting, said the top mining risks discussed at the Indaba conference were varied – relating to the environment, geology, safety, financial issues and the social licence to mine – but performance in all these elements could be improved with proper alignment of strategy and technology. This focus was a theme running through all four days of the conference.
Day one of Indaba was an optimistic affair compared to the past three or four years. Delegates were noticeably upbeat, and there were more of them. However, it was the reconciliatory tone of the South African Minister of Mineral Resources, Mosebenzi Zwane, that took most by surprise. In Zwane’ s welcoming speech, he emphasised the need to improve current geological knowledge, something Roger Baxter, CEO of the Chamber of Mines, touched on in an earlier press conference.
However, the elephant in the room was his failure to address the regulatory uncertainty compounded by the – now suspended – Mining Charter III, gazetted last year.
Jonathan Veeran, partner and deputy head of law firm Webber Wentzel’ s mining sector group on Mineral Resources, said he was disappointed in the speech and that Zwane did not take the opportunity to say that South Africa is open for business. Although, he concedes,“ I suppose Minister Zwane could not say that because of the political impasse that we are at.” Plus, the announcement by Speaker of Parliament Baleka Mbete on Tuesday afternoon that the State of the Nation Address, due to be delivered by President Jacob Zuma on Thursday evening, had been postponed, just highlighted the fraught political situation.
Veeran adds that there were three key elements that Zwane’ s speech did not address: policy uncertainty, specifically that surrounding Mining Charter III and policy inconsistency; unclear legislation and regulation; and the trust deficit that has arisen over the past five years due to these two issues.“ What you need to do in order to build a prosperous mining industry in South Africa is create a social compact between [ labour, business, communities and government ]. And those are for me the three key themes that the minister should have spoken [ about ] and highlighted because these themes need to be discussed.”
Overall, Zwane was optimistic about the future of South African Mining, saying that the mining industry in South Africa is now in spring time, and that it would be summer soon.“ Those companies that invested during the winter, will now reap the benefits,” he said.
He highlighted the mining industry’ s contribution to South Africa’ s emergence from a technical recession in the second half of last year.“ After two consecutive quarters of economic contraction, in the fourth quarter of 2016 and the first quarter of 2017, GDP rebounded in the second and third quarters of 2017, growing by 2.8 % and 2 %, respectively. This expansion has helped allay fears of sustained economic recession and was driven in no small part by growth in the mining sector,” said Zwane.“ In fact, the mining sector was responsible for no less than 2 % of the growth in the period.”
Later, during a midday question and answer session, Zwane was in a compromising mood, stating that his department’ s door remains open for anybody to discuss the controversial Mining Charter.“ We are willing to discuss and settle the matter outside court if we have to,” he said. But Zwane remains uninspiring, and what motivates his new narrative is anybody’ s guess. If he is really willing to negotiate remains to be seen. Yet, the positive talk adds to the building wave of optimism sweeping through southern Africa.
Even Baxter believes that positive winds of change are blowing through South Africa, and that a new political order in southern Africa is a cause for great optimism.“ We are definitely seeing a turn, and all the signs are there that we will have a much better 2018.”
And while in-depth surveying, geological mapping and making this information available online is essential to ensure a thriving exploration sector, Baxter stresses the need for more exploration projects in South Africa.“ There are many undiscovered ore-bodies in the country, and we need to encourage emerging exploration companies to become part of the mining environment,” he says.
When it comes to getting exploration projects off the ground, the big constraint is funding, which is something that,“ The government needs to address as soon as possible,” Bridgette Radebe, CEO of Mmakau Mining and official representative of South
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