Modern Quarrying October-November 2017

AROUND THE INDUSTRY

While the mood at the recent Junior Indaba mining event was sombre when it came to South Africa’s policy environment, there were some interesting opportunities being mooted for minerals like lithium. Junior miners talk new opportunities

Despite the difficult economic con- ditions, overall sentiment for the coming year is reported as positive; CRU research shows that 53% of respondents are hope- ful about the future, while a substantial portion of around 33% are undecided. “This level of optimism is probably driven by the recovery – in the last quar- ter of 2016 – of the steam coal market and the temporary recovery in ferrous metals,” says Theart. He highlights that while fer- rous metals fell back somewhat during the first part of 2017, the impact was off- set to some extent by an increase in base metal demand. Jeffrey highlights the lessons shared by industry ‘legends’, which include the warning that the while the orebody dic- tates, correct management is still the key to successful mining. “The speakers also encouraged us to get our hands dirty – to put in the hard work and to not expect something for nothing,” she says. “There was also the timely warning that money has no loyalty, and that it will go where the best returns are to be found.” Lack of data sharing amongst indus- try players was discussed, and it was pro- posed that the Council for Geoscience could play a role with other government stakeholders to facilitate an improved access to data. Growing energy demand in the region also inspired presenta- tions on coal and coalfield-linked power generation. www.srk.co.za

H ennie Theart, corporate consultant and partner at SRK Consulting, says he is interested that mineral demand outlook focused on those ele- ments that would play a role in the devel- opment of modern electrical batteries – such as lithium and cobalt. “The absence of the platinum group elements in this outlook is notable, and this may indicate the anticipated move from internal combustion to electric cars,” says Theart.“Given the natural abundance of lithium, however, it is unlikely that the demand for lithium will be linked to a sustained increase in the value of this commodity.” He says it will also be interesting to see whether an extended period of lower fuel prices would slow down this trend. The biggest dampener to the mar- ket’s growth is the slowdown in Chinese investment, followed by risks related to trade policy and geo-politics. This means that the dominant theme among mining corporations for the next year is expected to be technology innovation and automa- tion – both strategies to reduce cost and increase profit. On the South African scene, the main concerns included policy uncertainty and permitting issues, according to Lesley

Jeffrey, principal geologist (coal) at SRK. “Among the issues that the industry is struggling with is the length of time it takes to get mining, water and environ- mental permits from government,” says Jeffrey. “Uncertainty in mining policy is also having a negative impact on invest- ment, especially foreign investment.” Since the Junior Indaba, the June announcement raising various require- ments in the Mining Charter will have added to the concerns about the invest- ment environment. “When speakers discussed which countries are currently popular for exploration investment, they focused on North America, West Africa and Australia,” she says. “It was clear that SA was not seen as a good investment destination at the moment due to the policy uncertainty and permitting issues.” Given the focus of the event on smaller players in the sector, the legisla- tive burden on junior mining companies was raised – even leading to the sugges- tion of a ‘lite’ version of the Minerals and Petroleum Resources Development Act that would ease requirements for small mining companies. In a similar vein, the tax and royalty burden on mining companies also came under scrutiny.

Hennie Theart, corporate consultant and partner, SRK Consulting.

On the South African scene, the main concerns include policy uncertainty and permitting issues.

Lesley Jeffrey, principal geologist (coal), SRK Consulting.

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MODERN QUARRYING October - November 2017