Opinions divided on South Africa mining

South Africa faces an uphill battle to restore its reputation as an international mining destination, with investors hesitant to back projects there after years of policy upheaval (reports The Australian).
6th September 2019
Resources Rising Stars

South Africa faces an uphill battle to restore its reputation as an international mining destination, with investors hesitant to back projects there after years of policy upheaval (reports The Australian).

South African Mines Minister Gwede Mantashe used his address to the Africa Down Under mining conference in Perth on Wednesday to declare his country was again “open for business” following a turbulent few years.

The country, which helped spawn some of the world’s biggest mining dynasties, has steadily fallen down the ranks of gold producers in recent years and has seen its mining ­industry marred by ongoing labour disputes and policy uncertainty

Hopes for a turnaround have rested on Mr Mantashe, himself a former miner, and he said the country offered opportunity in a host of traditional commodities such as gold and coal and in battery-related minerals such as lithium, graphite and cobalt.

Orion Minerals managing ­director Errol Smart told the conference his company’s ability to secure mining rights over the Prieska copper-zinc pro­ject showed deposits could still be ­developed in South ­Africa.

“Two years ago I stood on this podium after the previous minister and everyone told me I was crazy. It was a very difficult time,” Mr Smart said.

“I told them to stick with it. When you’ve got an opportunity like this, it will develop. And it has ­developed.”

He said Mr Mantashe had made a big difference to South Africa’s Department of Mineral Resources and it was again possible to secure mining rights ­within appropriate time frames.

“There are more Australian juniors operating in South Africa today than there were three years ago because they see that South Africa is, as the minister said, open for business,” he said.

“There’s a long way to go yet, there’s a lot of things we need to find each other on, but, man, you can make it work in South Africa and it has got an exceptional geological environment.”

But Resolute Mining managing director John Welborn said that convincing investors to back projects in South Africa ­remained difficult.

Mr Welborn is enthusiastic about the potential of most of ­Africa, with his company operating the Syama gold mine in Mali and recently acquiring the Mako gold mine in Senegal for $US274m ($403.6m).

The company has also had an appetite for relatively high-risk jurisdictions, having picked up exploration ground in Sudan.

Mr Welborn said he also planned to meet with representatives from Zimbabwe at the conference to look at potential opportunities there.

But he said investor attitudes towards South Africa meant there was little prospect of Resolute picking up projects there.

“Forgetting the reality on the ground, the investor base I’m looking for in London, the US and here in Australia would find that really difficult,” he said.

He said the company would not have bought the Mako mine if it was in South Africa.

“South Africa is different, there’s a whole range of different drivers, union workforce relation­ships and Black Economic Empowerment structures,” he said. “It’s a specific jurisdiction that needs its own skill set from our point of view.”

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