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Miller laments lack of reported exploration data for South Africa

8th February 2021

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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Reform of South Africa's legislative and regulatory programme needs to be "far deeper" coupled with material improvements in administrative efficiency, if there is to be any improvement in the country's exploration performance, says mining supply sales consultancy AmaranthCX director Paul Miller.

In a recent blog post, he pointed to information provided by financial information and analytics company S&P Intelligence, which showed that South Africa's share of global budgeted exploration spending stood at $77.4-million in 2020.

This represents a 20.5% decrease from the $97.4-million spent in 2019 and is, according to Miller, the lowest amount spent on exploration since 2002, when $68-million in exploration spending was recorded.

He pointed out that that was the same year in which the Mineral and Petroleum Resources Development Act was passed by Parliament. 

He also mentioned that there had been a 7.8% decline in overall exploration spending in Africa to $1.01-billion in 2020 and that South Africa's share of African exploration spend continued to decline to a two-decade low of 7.66%.

The country's share of global exploration spend stood at only 0.95%.

Of greater concern, Miller said, was the fact that S&P Intelligence appeared to be the only source of publicly available data on South Africa's exploration spending.

“Most advanced mining jurisdictions track and publish detailed exploration-related statistics as an important leading indicator of the health of their overall mining industry. Those exploration statistics don't only reflect spending, but also operational metrics like metres drilled per month. 

"In South Africa, the Department of Mineral Resources and Energy neither tracks nor regularly reports any exploration statistics, so there are no alternative data trends to consider,” he stated.

Miller said it was assumed that there were between 4 500 and 5 000 granted and, therefore, likely active prospecting rights, but without any officially published statistics it was impossible to determine how many prospecting rights were actually being worked.

“The strong suspicion is that many are unfunded and are thus being held dormant, with the mineral potential effectively sterilised,” he posited.

“It is now abundantly clear that investors in minerals exploration have not responded positively to Minister [Gwede] Mantashe's rushed 2018 Mining Charter III, nor President [Cyril] Ramaphosa's entreaties to invest in South Africa.  This suggests a more fundamental reform of South Africa's mining investment policy is required,” said Miller.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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