The South African junior mining, and particularly prospecting, sector will continue its rapid degradation if the Department of Mineral Resources and Energy (DMRE) continues to refuse to publicly release information pertaining to national mining and prospecting rights, says mining supply sales consultancy AmaranthCX director Paul Miller.
He tells Mining Weekly that South Africa is already one of the poorest performing countries in terms of attracting investment into its minerals and mining sector in the world and that the current opaque database of mining and prospecting rights is severely undermining exploration interest in the country and failing to woo local and foreign investors.
“A cadastre that is not online and transparent enables corruption. It also covers up errors and incompetence,” he says.
The fact that investors, with vast amounts of speculative capital, are instead looking to invest in other regions, oftentimes with other challenges – such as regional insecurity, logistics obstacles and general inaccessibility, and potentially poorer deposits – means that South Africa’s mining industry will soon reach its end as the existing large mines are mined out, alludes Miller.
“Within the next 20 years, if there is no investment into exploration in South Africa, mines will be a thing of the past.”
Currently, he says it is unknown what information the DMRE actually has in terms of a mining cadastre.
A cadastre is a log of properties in a country, specifying who is permitted where, for which commodity, where a right’s borders are and the expiry date of those rights. A minerals cadastre lists available mining or prospecting rights, properties currently under a mining or prospecting right and the expiry of currently held rights and ownership thereof.
However, what makes minerals cadastres particularly useful for the mining industry, and especially the junior mining and prospecting sector, is that they should, ideally, also contain any and all historical prospecting data generated by whoever previously explored the property, says Miller.
This is a highly valuable resource in building up a country’s exploration database and is highly sought-after by exploration investors as properties can be continually explored and new deposits unearthed.
According to Miller, up until now, despite explorers being required in law, but not in practice, to actually work their prospecting works programmes and submit yearly reports to the DMRE, prospecting rights are not being turned over fast enough, nor is the historic information finding its way into the public domain. This leads to a scenario in which explored properties remain technically unexplored, as new data is not added to the stock of historic data already acquired.
This is because future explorers, although having known specific properties have been previously explored, still remain in the dark about what was found and where it was found and, thus, do not know where to continue future projects in the search for viable deposits.
By obligating explorers to share the data they generate and publishing it, the DMRE will be able to constantly improve the national knowledge of South Africa’s resources by licensing land parcels out and “giving new people a chance to have a go”, he says.
However, for this to be successful, Miller says the data needs to be published freely to encourage the next person with speculative money to invest to come along and put in the time and effort, as well as more modern technology, into potentially discovering the next viable mine.
“You want to encourage explorers to explore and you want them to easily be able to see what rights are available, which rights will be expiring soon, who holds rights in the neighbourhood, in case you want to do a bit of deal-making . . . This requires as much information as possible for them to make informed decisions about investing time and money in exploration.”
Thus, an online, publicly available minerals cadastre would attract investors, both locally, but also, and more importantly, from Australia, Canada and the UK – the primary regions from which the bulk of exploration investment has historically originated from.
This will ensure regular turnover of prospecting rights, a significant increase in the discovery of new mines, and the subsequent opening of future tier one mines, states Miller.
“Any mine is a declining asset from the moment it is opened. As a consequence, any country that wants to have a long-term and sustainable mining industry needs to replenish the pipeline of projects.”
Meanwhile, he also tells Mining Weekly Online that, although administratively burdensome, such an online minerals cadastre can be launched quickly, as the DMRE can study what has been done in other countries, some which even share a border with South Africa and copy or piggyback off what they have done.
“South Sudan – the poorest and youngest country in Africa currently has an online and freely available cadastre system,” he points out.
Mining Weekly requested comment from the DMRE on these matters, but has yet to receive feedback to questions around the creation of a mining cadastre.