The consulting engineering industry’s sustainability and growth are largely dependent on and proportional to the mining industry’s sustainability and growth respectively, says industry body Consulting Engineers South Africa (Cesa).

Cesa CEO Christopher Campbell notes that the success or decline of the mining industry directly impacts on the success or decline of consulting engineering companies, as the two are intrinsically linked. To illustrate, he cites economic changes in China that have had an impact on commodity prices and, as a result, have impacted on mining consulting.

“China, one of the largest users of mined commodities, decided to temper its growth rate from 7.5% in 2014 to 6.7% in 2016. “This 0.8 percentage point decrease meant a sizeable reduction in demand for the commodities required for infrastructure development, such as iron-ore, which caught mining and related industries off guard,” he explains.

This resulted in reduced investment in mining-related infrastructure development, with projects undertaken to develop logistical infrastructure for the transport of commodities becoming “pedestrian” and others being put on hold indefinitely.

“To fuel what became a perfect storm, we saw commodities markets worldwide slow down. “In South Africa, we probably added a bit more fat to the fire by creating a huge amount of political and policy uncertainty to scare off potential investors even more,” he comments. “The consulting engineering industry, along with others, became a direct victim of this perfect storm, as investment, even in prospecting, stalled.”

Campbell notes that, in the past two years, when the African mining industry had all but stagnated, “many of Cesa’s mining- focused member companies had great difficulty surviving, as they did not have a diversified service offering targeting either public-sector projects or even private-sector property development”.

He adds that those with a multinational footprint moved their resources to other parts of the world, while others had to resort to staff retrenchments.

However, the lack of mining projects not only adversely affected mining consultants. The reduction in mining tax revenue for governments – especially in countries where gross domestic product relies heavily on mining activity – adversely impacted on governments’ infrastructure spend, thereby impacting on the entire consulting engineering industry, regardless of specialisation.

“This does not bode well for the sustainability of our industry, especially when the effects are felt not only in local markets but also international markets, such as Zambia, Mozambique and Guinea, as well as . . . in Canada, Australia and Chile, among other countries – where our engineering expertise is held in high esteem and much sought after,” Campbell warns.

He notes that, during this period of decline, there were cases where mining companies disregarded recommendations by consulting engineers in a misguided attempt to cut costs.

Campbell stresses that this “unfortunate phenomenon” of second guessing the expertise of someone who has the requisite knowledge and skills is in direct conflict with the mining industry’s stringent health and safety regime and must be discouraged at all costs.

He notes that, apart from the potentially dire consequences for mineworkers, this casual disregard of consulting engineers’ recommendations by mining companies further hinders the sustainability of both industries.

“We are not ignorant to the fact that mining investors have very little regard for the sustainability of our industry,” Campbell comments, pointing out that this is short-sighted, because without a local and effective consulting engineering industry, owing to “little or no engineering practitioners with sufficient mining experience”, the result will be either costly and unproductive projects or projects that “never get off the ground”.

Despite these challenges, “there seems to be some hope on the horizon,” he says, citing China’s growth, which has picked up from 6.7% in 2016 to 6.8% in January, with prospects of this growth reaching 7% by year-end.

Campbell notes that this growth will likely drive up demand for commodities, supporting expectations of a mining boom in the not too distant future.

Therefore, he suggests that stakeholders start preparing to deliver the stock needed to supply such a boom. However, whether this stock will be available is yet to be seen, as recent media reports paint a picture of local mining houses not investing enough in exploration.

Cambell says another area that has not been adequately explored is how to leverage local engineering expertise to develop industries around the beneficiation of commodities.

He calls for the development of a more holistic approach to mining by South Africa’s public and private sectors, with consulting engineers and the construction sector contributing as interested and affected parties to address some of the challenges facing the country’s mining industry.

Campbell adds that the current impasse between South Africa’s government and its mining industry needs to be resolved, concluding that “we need to ensure that we have a sustainable mining industry, regulated by constructive and well-informed policy [that is implemented] led by competent people who put South Africa first”.