O ne of the pleasures of having grandchildren is watching nature programmes with them. I have learned recently of Sicyopterus stimpsoni, a fish that scales 100 metre waterfalls to reach fresh water after having been spawned in the ocean. These tiny fish have evolved to use their mouths to scale slippery, vertical slopes. Their determination to achieve their goal against such odds is impressive.
This analogy is, for me, similar to being a miner in South Africa. To put it bluntly: mining can be an uphill battle.
We heard last week at Joburg Indaba of some of the challenges faced by miners, and especially for explorers and juniors. We heard about regulatory delays and the lack of transparency. And while we heard about progress with the development of the new mining cadastre system that will bring efficiencies, transparency and accountability to the mining applications system, as one fund manager put it ‘seeing is believing’.
We all buy into the story of the potential of Eskom getting its act together. In the meantime, miners have been allowed to generate their own power, which has alleviated their own energy challenges and has also helped address the national energy deficit.
Our impression of Transnet’s turnaround remains in the ‘hope’ category. It seems Transnet is finally opening up to partnerships to get assistance from the private sector. The talk is more positive than a year ago, but there are no runs on the scoreboard yet. To the extent that Transnet is open to the same process that resulted in the collaboration that has bolstered Eskom, we can realistically expect some progress in the next year.
Policy bugbear
My overwhelming impression from a week of interrogation, debate, a little posturing, some levity, and a whole lot of goodwill is that South African mining is open for business.
And this is why.
First we simply have the right address. No other country has the advantage of the Wits Basin which, after 130 years of being mined, has not been depleted. No other jurisdiction has the Bushveld Complex, which holds 80% of the world’s platinum. And, of course, with platinum comes chrome, one of the metals of the moment.
While we might have been overtaken by our neighbours in respect of copper discoveries, there remains significant opportunity to apply modern technology to copper exploration with a high potential for new discoveries. And, then there’s our natural endowment of manganese, with the potential for substantial and more critical minerals discoveries.
I like to think that the creator of our phenomenal orebodies had a big smile on his or her face when allocating our mineral endowment, which has been successfully opened up through the new minerals’ dispensation over the last 25 years.
So, if we have been gifted by this geology, why aren’t more investors coming here? The honest answer is that we haven’t explored enough, and there are good reasons, most notably policy uncertainty.
The demands placed on risk capital are simply unrealistic, as is our unwillingness to compete with the rest of the world where successful countries incentivise exploration. Our government, certainly in the last 20 years, could be described as being a little arrogant, thinking that prospectors would simply come and explore and accept that if they find something, will then be told how much of that they can have, and how much the state will take or give to others. And the explorers have voted, taking their tents and land cruisers elsewhere, along with their dollars of drilling money to other jurisdictions.
But there is a new and different realisation emerging. We are seeing a regulatory regime that is cognisant of past failings and the need to engage and do better. Simply put, the Ministry is ‘in the room, and at the table’ not just literally as we saw at the Joburg Indaba last week, but figuratively as well.
That is not to say though that the onus is all on government. It is not. We pushed mining company CEOs to commit to ‘putting their money where their mouths are’. Are they here to stay, we asked them. And what will they bring to the table?
Generation of hope
Another observation I have from the Joburg Indaba is that mining is a generational story, where knowledge and experiences, lessons and solutions have been passed from generation to generation. But its main purpose is more subtle – it is to build resilience, particularly in adapting to change and finding opportunities, often through adversity.
We have a very long history in mining in every sense, with unparalleled wealth of knowledge and expertise, not only in boardrooms, but in technical innovation and capability and at the rockface. And we are experiencing an exciting generational shift in leadership.
Our government, certainly in the last 20 years, could be described as being a little arrogant, thinking that prospectors would simply come and explore and accept that if they find something, will then be told how much of that they can have, and how much the state will take or give to others
Yes, we are retiring 65 year-old white males that have made significant contributions to the industry, but you have to be blind not to see the potential of the next generation of mining leaders here and elsewhere. And this is an industry that is tapping into the full potential of all South Africans.
Our Mines Minster very recently told the President that the mining industry is the most transformed in the country.
The generation that is now starting to run our mines have grown up in this challenging environment. They are fish that swim upstream.
And while it’s true that we are an exporter of worldwide skills, we should actually be proud of that, because you can only export skills if they are exceptional. And while there are those that leave (and sometimes come back), there are also that are prepared to stick around and make a difference.
Coming back to Sicyopterus stimpsoni, the fish that scales vertical waterfalls – if the mining industry can sustain itself despite all the obstacles it has faced, imagine how it would thrive if the challenges were not a 90 degree cliff but a 45 degree slope. This would open up enormous possibilities for exploration and new discoveries, for investment and socio-economic development, for jobs and opportunities.
Bernard Swanepoel is a former mining CEO, Board member, and convenor of the Joburg Indaba
