While the mining sector suffered losses of $1-billion in 2014, the insurance market has not been negatively affected and remains competitive, global insurance broker and risk advisory firm Marsh mining, metals and minerals division executive Debbie Geraghty says.
She states that the insurance market is expected to remain stable or soften in 2015 should the mining sector experience major losses.
“However, in the event major mining companies start to sell their operations, junior mining companies might be in a position to step in and run the mines more cost effectively, which will create jobs,” she says, adding that the price the majors are selling the mines at would determine whether they are viable for a junior to buy.
Geraghty notes that the mining sector was strained last year as a result of low commodity prices and protracted strike action. However, despite the challenges facing the industry, Marsh clients with well-managed risk portfolios were able to reduce their insurance premiums by up to 30%, increase their self-retentions and arrange finite deals over three- to five-year periods.
To better service its clients in 2015, Marsh will introduce new insurance policies covering areas such as environmental guarantees; cyber liability; environmental liability resulting from gradual, sudden and unforeseen circumstances; and buy-down deductibles to reduce business interruption deductibles from 30 days to 14 days.
Geraghty states it is important for all mining stakeholders to keep abreast of what is happening in other sectors of the mining industry.
This information sharing will be facilitated by the 2015 Investing in African Mining Indaba, which takes place and runs from February 9 to 12 at the Cape Town International Convention Centre, where Marsh will arrange meetings with delegates to showcase the company’s service offering to the mining industry.
She says the indaba is the one event where all mining stakeholders can come together to share knowledge, as mining companies, contractors, investors, analysts and suppliers to the industry are all present under one roof.
Geraghty tells Mining Weekly that, because the majority of mining companies operating in South Africa are clients of the local arm of Marsh, the company will arrange meetings with current and prospective clients in attendance at the Mining Indaba.
“We definitely see value in creating new business contacts with delegates attending the conference. We have made particularly good contacts at previous events, when companies handling projects outside South Africa required mining and construction insurance expertise,” she emphasises.
She points out that Marsh finds presentations on the state of mining legislation in Africa particularly useful.
“Any sessions relating to changes in mining legislation are important for us, as they enable us to understand and be part of the solutions, where possible,” Geraghty concludes.