JOHANNESBURG (miningweekly.com) – A strong call for unemployed geology graduates to be contracted to capture historic exploration data electronically has been made by Letaba Elihle Investments (LEI) principal geology consultant Siphelele (Siphe) Ntshangase.
In a Zoom interview with Mining Weekly Ntshangase also called on South Africa’s Department of Mineral Resources and Energy (DMRE) to:
- revamp and modernise exploration policies;
- create an environmental rehabilitation fund for junior miners;
- develop a free and transparent ‘open-file’ database of geological information;
- lower prospecting right application costs to a level that encourages juniors to engage in the greenfield exploration so desperately needed;
- urgently complete the upgrading of the Samrad cadastre system, or replace it with a modern and transparent mineral cadastre;
- double the 5 ha limit on mining permits to 10 ha to ensure optimal exploitation at reasonable cost;
- partner with professional service providers to help juniors navigate compliance processes on a consultative basis, at affordable rates;
- simplify early-stage exploration permitting via a ‘tick-box’ and ‘one-stop-shop’ approach;
- establish a dedicated junior miners’ desk at each regional DMRE office to speed up approvals; and
- solidify regulatory certainty.
LEI Advisory is a South Africa-based black women-led and women-controlled technical and management advisory firm, which has a primary focus in the resources sector and which is built on an owner-operator model. (Also watch attached Creamer Media video.)
Ntshangase emphasised that the funding needed for prospecting rights is currently well beyond what juniors can afford, which is worsening the serious backlog of greenfield exploration at a time of mine life decline.
“We need to find a fit-for-purpose approach without impacting on the environmental social and governance or ESG aspects,” she said, adding that a support mechanism could be an Environmental Rehabilitation Fund, with qualifying participants using the fund to provide the required guarantees.
Ntshangase suggested that the DMRE and the mining industry work together to create such a rehabilitation fund for juniors.
NEED FOR HISTORICAL DATA CAPTURE
Ntshangase urged that greater recognition be given to geologists and the contribution that they can make to the South African economy.
She spoke of South Africa having highly-experienced geologists with great South African insight, who could work with the government to develop a database which the large number of unemployed geologist graduates could help to develop.
The initiative, she said, could create graduate employment “and on the way they will also be learning what is part of our history of geology in South Africa”.
“If you just go to LinkedIn and you look at how many geology graduates are looking for employment, it’s crazy, and the worst thing for graduates is not being able to get a job after graduating,” said Ntshangase.
South Africa is suffering a major mineral exploration and mining rights backlog, which, when last reported, stood alarmingly at more than 5 000 unprocessed exploration applications and 235 unprocessed mining right applications. On the Samrad issue, Ntshangase reiterated the urgency: “They need to act on it now.”
WHY HECTARE LIMIT NEEDS INCREASING
Ntshangase decried the 5 ha limit on mining permits, which she said needed to be at least doubled to allow bulk commodities and tailings dam recovery projects to be optimally worked without being constrained by off-putting costs, brought about by having to apply for more mining rights to access the additional area required to do the job. “It just becomes a nightmare for juniors,” she said.
DEDICATED JUNIOR MINERS’ DESKS
Dedicating a unit within all regional DMRE offices is seen as a way of avoiding delays, the consequence of which often results in juniors having their funding withdrawn.
“Juniors end up losing their funding because of the long time that it takes for applications to be approved by the DMRE. Dedicated desks for juniors would speed up the processes of some of these applications and I think the DMRE should really consider that, because we are supposed to be helping juniors but we are really putting them at a disadvantage right now,” Ntshangase lamented.
Lack of funding owing to regulatory uncertainty is common: “There needs to be more consistency in the regulation. If there is more consistency, juniors will attract more funding,” said Ntshangase, whose overall view is that the current policies and legislation applying to minerals exploration, development, and mining should be revamped and modernised.
“The current policies and legislation are not conducive to exploration and the development of an effective junior exploration and development sector to unlock small and medium deposits, and create a transformed and modern mining sector.
“Current policy and legislation is biased towards the large mining sector and companies that either have their own internal legal, environmental and compliance departments, or have access to large external legal and compliance firms,” Ntshangase concluded.
EXPLORATION'S ECONOMIC MULTIPLIER EFFECT
As Integral Asset Management mining analyst Bruce Williamson pointed out to Mining Weekly last month, explorers and miners are the pioneers that open up a country’s economy in a manner greater than any other sector of the economy. Without them, there is a lack of knowledge about the country’s full potential. By simply taking ore out of the ground, mining, preceded by exploration, initiates significant benefits that extend vertically and laterally throughout the economy.
Enable mining companies with good coherent policy and the magic multiplier works, said Williamson, who points out that, apart from the infrastructure required to build a mine and the plant and equipment, and the daily consumables that mines require, mining supports heavy and light industry, with the chemicals industry in particular feeding into the metallurgical plants of mines. Moreover, mines and the companies they support also need auditors, accountants, lawyers, insurance, tax advice, banks and stock exchanges, while the people living in the towns that they create require food, housing, schools, healthcare, retail and everything else that goes with life and living.
The end-game is that mining assists in diversifying the economy, which means that people end up working in many fields of endeavour – “and let’s not forget about exports that mining generates. If we did not have the dollar flows coming in from the sale of our minerals, we would probably be a very isolated, closed economy”, Williamson pointed out.
Right now, mining is offering unexpected bonanzas, with the rising prices of particularly platinum group metals and iron-ore boosting the inflow of dollars into South Africa and strengthening the rand. In addition, increased taxes are flowing into the coffers of the South African Revenue Service at a time of dire need.