- Minerals Council South Africa (0.58 MB)
A key development that resulted from the much maligned 2017 Mining Charter, and the subsequent appointment of Minerals and Energy Minister Gwede Mantashe, was increased and fruitful engagement between the Department of Minerals Resources and Energy (DMRE) and Minerals Council South Africa, particularly in terms of exploration and junior mining.
Minerals Council Junior and Emerging Miners’ Leadership Forum (JEMLF) chairperson and Orion Minerals CEO Errol Smart explains that, without the junior sector – which includes prospecting, exploration and mine development – South Africa’s known reserves will be exhausted, and the mining industry will continue to wane.
Minerals Council Junior and Emerging Miners Desk head Grant Mitchell explains that, given its importance to the industry, the Minerals Council places significant emphasis on junior mining. Currently 34 junior miners across all commodities, over and above the hundreds represented through associations are Minerals Council members. In fact, by number junior and emerging miners now represent around 40% of total membership.
“The Minerals Council board is the apex of the Minerals Council. Beneath the board there are ten leadership forums that are mostly commodity-based, but include other forums, such as the JEMLF,” explains Minerals Council Social Performance head Alex Khumalo.
He notes that the forum provides a platform for member companies to share their views and concerns on developments affecting the sector as well as to elevate issues to the board, as and when needed.
The Minerals Council Junior and Emerging Miners Desk, meanwhile, supports juniors by offering expert advice on various mining-related concerns, as well as facilitating communication with the DMRE and other government or regulatory bodies.
The Minerals Council also has policy committees for key aspects, including the Labour, Health & Safety, and Environmental policy committees.
Eight “champions” have been elected to represent the JEMLF at these committees, both to ensure that the juniors’ perspective is communicated, and to report back to the JEMLF regarding key developments.
Mitchell stresses, “one of the biggest benefits of membership for juniors is that the Council will canvass opinions to ensure their interests are communicated to government” and will try to influence policies in favour of junior and emerging miners. The second is that the Minerals Council is engaged in ongoing research to “build up a knowledge base” and disseminates key information and best practice through public webinars and other platforms.
Khumalo comments that membership also serves to improve the overall perception of the industry, because Minerals Council members, who represent 90% of the industry, must adhere to the mandatory Membership Compact, agreeing to engage in ethical business practices.
Notably, junior and smaller producers are “essentially subsidised by majors”, as their fees are “very affordable”, particularly for non-producers, says Smart.
Further, initiatives such as the Covid-19 Vaccination Centres and the Covid-19 Management Systems, were “developed by the majors, with input from juniors, who benefitted from access to said initiatives.”
Smart states that there is “enormous value in becoming part of a collective that is actively creating its own succession plan.”
This “succession plan” is evident in the Minerals Council’s engagement on Mining Charter III and the fact that prospectors and developers are now exempt from Charter obligations, which has been instrumental in renewing interest in the sector.
“We have to recreate greenfield exploration because it largely doesn’t exist in South Africa. In 2019, we attracted less than 1% of global exploration spend, in one of the biggest mining economies in the world. That’s criminal,” Smart avers, adding that an unfavourable regulatory environmental has largely been at fault for the industry’s distress.
However, engagement with the DMRE led to the removal of Charter obligations for prospectors as well as to the establishment of a task team to promote exploration. It has also led to a general consensus that the current SAMRAD system is detrimental to the sector and needs to be replaced.
“We need a mining cadastre that is user friendly, transparent, effective, efficient, and digital. One that will demystify and simplify the application process, while ensuring that mineral title ownership remains sacrosanct,” states Smart.
During the Parliamentary Portfolio Committee meeting in March, Mantashe committed the DMRE to implementing a new system within six months, however, Smart suggests that a more accurate timeline is probably closer to 12 to 18 months.
“The Minerals Council has offered to fund some of the work in creating this new system as well as some of the training. We have the necessary skills within the Council to ensure a smooth transition away from SAMRAD. If the DMRE chooses the right system, something that can directly interface with the system used by a significant number of local mining houses, then roughly 40% of the mineral rights data can be inputted almost immediately.”
Khumalo adds that establishing a more accurate view of mineral and prospecting rights and land use in South Africa must go hand-in-hand with access to land for exploration purposes.
“Mineral resources belong to the State, but surfaces rights reside with the landowner. We need to find a better way of engaging with landowners. Access issues can lead to exploration being delayed by months,” he comments, citing project delays holding up investment worth billions, owing to a lack of consensus between right holders, the regulator and the communities who reside on or near the land.
Smart says there is also a push to standardise procedures and to establish an Exploration Strategy to drive growth. The strategy will include input from the DMRE, the Minerals Council and the Council for Geoscience and will focus on exploration; the policy and regulatory framework; improving the operational environment; and establishing a one-stop shop to unblock outstanding mining licences and rights.
Having spoken to the DMRE director-general Thabo Mokoena at the Junior Indaba earlier this month, Smart says there is an indication that Mokoena is waiting for direction as to whether the strategy must be approved by Cabinet before it goes out for public comment. Mitchell adds that all indicators point toward government trying to fast-track the document, and that hopefully it will be published sooner rather than later.
“There are juniors and private individuals that are actually doing geophysical surveys and starting to drill holes and I see that as a huge success. It shows that things are changing, and people are prepared to make risky investments because slowly but surely, we’re implementing a friendlier and friendlier regulatory environment. If we can agree to this exploration strategy and it can be implemented by the DMRE, then the floodgates will open for massive investment into South Africa.
“Prospecting is unique in that it starts generating value as soon as the prospector receives money from its investors. As soon as they start drilling holes, money actually starts going into the economy; they’re employing people, renting machines, paying for assay results. That money goes into circulation and that is the quickest way to unlock foreign direct investment and grow the economy,” Smart concludes.