Page 22 - Forbes - Africa (March 2020)
P. 22
FORBES AFRICA
FOCUS • MINING
thesefactorsmakeiteventougherfortheminingscoutsonthefront
linewholosesleepthroughhighriskandnarrowmargins.
“OurmembersinvestedR55billionandearnedR54billionin
revenuelastyear.Thatshowsyouthatitisatoughgig,”saysSmart.
FormerfinanceministerTrevorManuelpromisedtaxbreaksfor
juniorminersmorethanadecadeago.Juniorminersarestillwaiting.
MmadikelediMalebe,thedeputydirectorgeneralofthe
DepartmentofMineralResources,says:“Wedealwithallapplications
onreceiptandwealwaystrytoassistjuniorminerswiththeir
paperwork.”
Juniorminersplanmeetingswithgovernmentinthe coming
What we want to see is monthstoraisetheirissues.
action, action, action. BigmininginSouthAfricahasitsproblemstoo.
– Roger Baxter, CEO of MCSA ItsawtheMiningIndaba,attendedbyscoresofgovernment
mandarins,astheplacetoairthem.
Powercutsofbetween2,500MWand3,000MW–theoutputofa
abilitytopourintheoceanofcapitalneededtofullyexploitit. largepowerstation–contributed,alongwithcostsrisingat3%above
Oneoftheaimsofthisconferencewastoconnectjunior inflation,toclippingSouthAfricanproductionby2.8%,in2019,inan
minerswithinvestorsfromaroundtheworld.Oneofthe industrythatemploys454,861workers.Itwasthesecondyearinarow
supremeironieswasthatthejuniorminersofSouthAfrica thatproductionhasfallensignificantly.
wereamongthosewhomadealotofnoiseclaimingtheywere Goldsawanuntimely13.5%productiondropinSouthAfricawhen
beingignoredbyinvestors. theworldiscryingoutfortheyellowmetal.
Therearearound1,500SouthAfricanjuniorminers Centralbanksaroundtheworldarebuyingmoreaseconomies
whichsupport45,000jobs.Theyreleasedareportthrough preparefortoughertimesandlosefaithinthedollar.Thecentralbanks
theMineralsCouncilSouthAfrica(MCSA),ondaythreein bought656tonnesin2018–thebiggestamountsincemajoreconomies
CapeTown,claiming230,000jobscouldbecreated,through cameoffthegoldstandard–andlastyear,another650tonnes,
themultiplier,ifthereweretaxbreaks,lessredtapeandmore accordingtotheWorldGoldCouncil(WGC).
supportfrominvestmentfunds. Thegoldpricerose12%inthelastyearandeventhoughthereare
“AlotofpeopleatMiningIndabasaytous:‘Ifonlythis 190,000tonnesofgoldintheworld–nearlyhalfofwhichwasminedin
miningprojectwasinAustraliaitwouldbe10timesthe SouthAfricaoverthelast130years–thereisashortage.Accordingto
valueofthemarketcapitalprice’.Itissad,”saysErrolSmart, theWGC,worldsupplyis3,400tonnes,anddemand4,500tonnes.
ofjuniorminerOrionMinerals,oneofthepresentersofthe “Thegapbetweendemandandsupplyisbeingfilledbyrecycled
report. jewelrybuttherearenotenoughnewgoldminesbeingbuilt,”says
SmartclaimedSouthAfricawaslosingprojectsacrossthe JohnReade,theheadofresearchfortheWGCwhospentyears
bordertomorego-aheadminingnationslikeBotswanaand workingforGencorinSouthAfricangoldmines.
Namibia.Heclaimedjuniorminersstruggledtowadethrough Onereasonisthatminingcompaniescan’trelyonaconstantsupply
pilesofbureaucracyandscorecards,atwhatheclaimsisan ofelectricity.TheMCSAunveileditsplantoplugthepowergap.It
overstretchedDepartmentofMineralResources,thatisoften hasalistofpowerprojects,includingwindandsolar,thatitclaimscan
difficulttocomprehendbytwomenwithanexcavatoranda createmorethan2,000MWinninemonths.
dumptruck. TheMCSAchiefeconomistHenkLangenhovenreckonedthat
“Wehavegottodeclutterthesystemandgetredtapeoutof theseprojectscouldgenerateupto10%ofthepowertheminesneed
theway,”saysSmart. andactasahedge.
AnotherproblemforSouthAfricanjuniorminers–ina Theonlyproblem,saysRogerBaxter,CEOofMCSA,isthatittakes
landofbigminingandbiggovernment–isthatinvestment araftofexpensiveandlengthybureaucracy,includingnegotiating
fundsherehavenomandatetoinvestintheirprojectsoften withmunicipalities,registeringachangeofuseoflandandpayingto
consideredtoosmall. connecttothenationalgrid.Anyprojectbiggerthan1MWhastogo
Ironically,accordingtoSmart,Australianpensionfunds throughthesehoops;theminingcompanieswanttheredtapecleared
investinSouthAfricanjuniorminingprojectsalongwithretail away.
investors in Canada who enjoy tax breaks for doing so. All of “At last, this is being seen as a country problem and not a mining
20 | FORBES AFRICA MARCH 2020 FORBESAFRICA.COM
