As the host of the largest mining conference in Africa and the most influential mining investment event in the world, the directors at Mining Indaba regularly meet with top mining CEOs, mining investors, African ministers, and other leaders in African mining from Australia, Canada, the UK, and beyond. So it’s no wonder the agenda each year touches on the most prominent topics of interest and the cutting-edge issues of the day.

I thought it might be interesting to gather the observations of my colleagues Kael O’Sullivan, Director of Investor Relations, and the head of the commercial team, Fred Noce – who has been with Mining Indaba for nearly 10 years – to find out what they’re hearing on the street.

While opinions vary – depending on who you speak with, how their company is faring, and their general view on life – most agree that the sentiment across the sector has greatly improved from this time last year, as most major mined commodities have experienced price growth or, at the very least, price stabilisation. The consensus view seems to be that the bear market is now over and, although there might be some ‘bumping along the bottom’, we’re now through the worst.

The mining companies still standing have survived the severe bear market mostly through restructuring balance sheets, cutting CapEx, trimming project pipelines, reducing/cancelling dividends and optimising cost structures.

Thus far gold has captured most of the headlines in 2016, lifted mainly by economic uncertainty around the globe, with prices rising from below USD 1,100 at the start of the year to currently well over USD 1,300. Naturally, our listed mining clients with gold projects in Africa have largely experienced strong stock market performance as a result. For instance, ASX-listed Resolute Mining, with operations in Mali and Ghana, is up over 700 percent year-to-date.

The supply/demand dynamic for zinc, nickel and tin is going to be relatively tight over the medium term because there has not been enough new mines to replace those closing down. This has been pushing up prices for these commodities and making them attractive for investment.
Other commodities (i.e. iron ore, lead, copper and aluminium) have seen a lot of large-scale mines start producing within the last few years resulting in increased supply hitting a relatively weak market. As such, the outlook for these commodities is not as strong.

On the investment side of the equation, many specialist investors are cautiously optimistic, and there has been more investment and M&A activity, according to some we’ve spoken with, across the sector. Though all acknowledge that the markets are cyclical, it has taken longer to get out of the slump than most anticipated or at the least hoped. Many investors have said that they believe the worst is behind us. They may be slow to react but are beginning to look for new investment opportunities. Some investors are still waiting to see what will come of the European Union and Brexit, and this is driving the markets of some commodities up (i.e., gold and silver).

If Mining Indaba registration is any indicator of market sentiment (leading or trailing?) then it’s more good news. Mining company registrations are up 63% compared to this time last year. Particularly notable are the number of junior mining companies (likely due to the 50% rate reduction). And Investor registrations are up a whopping 120%. This, after investor participation nearly doubled in 2016. Sponsors are signing on earlier than last year as well, up more than 40%. Plus, several companies have already committed to return or increase participation in 2017 after market conditions inhibited participating last year.

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