Mining industry sunrise at even odds – consultant

3rd October 2019 By: Mamaili Mamaila - Journalist

Mining industry sunrise at even odds – consultant

SWIFT PROGRESSION There is now a need for projects to progress from exploration to production faster and, as a result, obtain funding quicker

Recent debates regarding the South African mining industry have centred on whether it is a sunrise or sunset industry.

Local mining engineering consultancy Ukwazi business development director Spencer Eckstein comments that, while the sun may rise on certain aspects of the sector, it may set on others.

Although the fundamentals of costs, revenue and operational excellence – inherent features for the industry as a whole – remain the same, the industry has been on an innovation and cost optimisation path for the past few years, Eckstein states.

“If the industry is managed in a way that shows good corporate governance, builds skills and encourages technical solutions specific to the local environment, we will attract the necessary capital investment to expand and extend the lives of our mines and find new ones to create employment, economic opportunities and advance the upskilling of our workforce,” he adds.

Ukwazi MD Jaco Lotheringen warns that the mining services sector can no longer afford a conventional approach to mining.

A recent trend that has emerged even in major mining companies with large, complex operations, is to use concentrated and focused expert teams, rather than larger generalist type teams to tackle complex operational challenges or detailed mining studies. In essence, it is a ‘team of teams’ approach, he avers.

The benefit is that, regardless of whether you are a large mining company or a junior, you can compete for the same opportunities or deliver high-end technical and operational solutions.

“A specialist team already has the required knowledge and experience to deliver a solution in a manner where the learning curve is significantly reduced, through the application of lessons learnt on similar projects, using appropriate and tested risk mitigation strategies.”

Subsequently, as there is a need for projects to progress from exploration to production faster and, as a result, obtain funding quicker, Eckstein emphasises the need for alignment in companies’ factors of production to cater for compressed learning periods, while allowing for narrower margins for error.

“This kind of synchronisation now needs to be in place a lot quicker than before. Projects need to be planned, executed and monitored appropriately. In that way, the investors and owners can be cash positive, faster and protect their investment at an acceptable risk profile.”


Ukwazi is active in a number of operations in eMalahleni, in Mpumalanga, and Kathu, in the Northern Cape, where it provides studies and on-site technical and mining contract management services for the mining majors and a range of junior miners.

“We have local offices employing and developing local skills in both areas where we assist to progress projects to a funding stage. Post funding, we are involved in the implementation and ongoing technical and contract mining services at those mines,” says Lotheringen.

The company has also embarked on three initiatives to support junior mining, the Fourth Industrial Revolution (4IR) and stakeholder collaboration.

“We are focused on helping our clients to set up effective and experienced owners’ teams for the implementation of their projects,” Eckstein stresses.

Amid the inherent difficulties for junior mining companies operating in South Africa, such as limited levels of support and funding, Ukwazi provides juniors and midtier miners with a customised “owners’ team” model, which focuses on the preparation planning, contracting models, mobilisation and construction management for the development of their mine.

“We have the experience and the skills to provide the service for the duration that it is required. In that way, we carry some of the risk when a junior or midtier miner has access to established large in-house owners’ teams as they operate with a small core team pre-implementation phase,” Lotheringen explains.

Additionally, while there is still more groundwork to be done regarding the integration of 4IR in mining, Ukwazi – through its digital mining initiative – aims to assist mines in securing the baseline data integration required for operational decision-making and management reporting.

“We provide systems and solutions that enhance operational excellence and support the management team to enable them to make informed decisions based on the actual performance of the operation,” says Eckstein.

Further, Eckstein notes that the definition of stakeholder has evolved in the current mining environment. There is also a broader social licence to operate aspect.

This requires intense stakeholder engagement and consensus building, thereby necessitating more input, time and energy from mining companies.

“Although this is something that has enjoyed the spotlight for years, its importance cannot be underestimated. Operations cannot function without the support of all relevant stakeholders.” Lotheringen emphasises.

Indaba Participation

Ukwazi is a networking sponsor for the 2019 Joburg Indaba. Eckstein says the conference – which is becoming increasingly significant from an industry perspective as it continues to grow in stature and size – provides the company with an opportunity to be associated with industry leaders and to market its services.

“It is a great platform to exchange, gain and share professional insights based on the programme of the event. It also enables us to benchmark, to some extent, where we are, relative to our competitors,” he advances.

The conference also provides key insights for Ukwazi regarding developments in the industry, with Eckstein noting that its participation is part of the company’s initiative to be an active player in the mining industry.

“We need to understand what the movements in the industry are and what companies are actively involved, as well as identify the main role-players,” Lotheringen comments, concluding that the event is a means of attaining this information.