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MODERN MINING
February 2016
EVENTS
theme, of course, was the commodities collapse
and the changing role of China as a driver of
world mining. Rio Tinto’s Davies, for example,
who heads its Diamonds and Minerals busi-
ness, while acknowledging all the negatives
of the present mining environment, expressed
confidence that China would remain “an
engine of demand in our sector” in the longer
term. “I visited China many times last year and
I’m optimistic about the long-term economic
story: consumption is contributing to about 60
per cent of China’s economic growth and new
areas of growth are emerging,” he said.
Davies also reaffirmed Rio Tinto’s com-
mitment to Africa, telling delegates that the
global drivers of long-term demand in Africa
all pointed in the right direction. “That is why
Rio Tinto, which currently has nearly 5 000
employees and contractors in Africa, continues
to invest and explore the continent for future
opportunities,” he said. “In particular, our
exploration team is looking at potential projects
in Botswana and Namibia.” He noted that even
in the face of lower commodity prices, Africa
remained a global growth hub.
Another believer in Africa is TSX-listed
Ivanhoe Mining, which is pressing ahead
with its Platreef project in South Africa and
its Kamoa copper project in the DRC (as well
Anglo American’s Mark
Cutifani at the podium. The
theme of his presentation
was ‘Making the right
choices in the face of
accelerating change’.
as continuing its rehabilitation of the his-
toric Kipushi copper-zinc mine, also in the
DRC). The company’s Chief Executive, Robert
Friedland, a regular – and popular – speaker
at the Indaba gave his normal upbeat presen-
tation, arguing that there was a (relatively)
positive outlook for PGMs, copper and zinc
and describing Ivanhoe’s African assets as
world class.
Friedland – who last month was inducted
into the Canadian Mining Hall of Fame – said
the Platreef underground mine in South Africa,
already under construction and due for ini-
tial production in 2019, would be the biggest
platinum mine in the world, which would
eventually exceed in size even its near neigh-
bor Mogalakwena. He also noted it would be
a highly mechanised and automated operation
and said – with characteristic hyperbole – that
workers at the mine would be professionals
who would never have to lift anything heavier
than a pen.
Anglo American’s Cutifani gave some inter-
esting facts on the parlous state of the mining
industry, pointing out that the aggregated
market cap of mining stocks in the FTSE All-
share index had declined from US$555 billion
at the start of 2013 to just US$169 billion on
1 January this year, adding that global mining
stocks had lost US$1,4 trillion of market value
since 2011 – more than the combined value
of Apple, Exxon/Mobil and Google. He put
forward the view that – at least on the supply
side – the industry was largely to blame for its
predicament, particularly in the case of certain
commodities, having failed to adjust supply to
align with decreasing demand growth.
“There is no doubt that the downturn in min-
ing commodities is having a major detrimental
impact on people, supply chains and govern-
ments at every level. From Western Australia,
to South Africa, to Brazil, Chile and the US,
resource-rich countries had grown used to the
fruits of healthy taxes and royalties in all their
planning and budgeting. They now have diffi-
cult choices to make, as they’ve squeezed the
pips dry on mining’s golden goose – if you’ll
allow an Aussie miner to horribly mix his meta-
phors,” he said.
“Moreover, we can’t rely on a reversal of this
price slump any time soon. For many of us in
the industry, 2016 is already shaping up to be
the most challenging yet. Opinions are divided
on whether we have reached the bottom of the
cycle … so things may still get worse before
they get better.”
Wrapping up his presentation, Cutifani said
tremendous changes were taking place in the