MARCIN WERTZ Strong leadership is vital to ensure the next mining upturn can be capitalised upon
Signs of a resurgence in platinum, a stronger gold price and growing coal exports to India should be triggers for South Africa’s mining leadership to grasp the opportunities it missed in the last commodities boom, says SRK Consulting South Africa.
SRK Consulting partner and mining unit head Marcin Wertz says it is time for the mining sector to gain traction from the National Development Plan, the Mining Phakisa and the Mining Lekgotla – all crucial initiatives that have yet to be given real substance. “Technical, social, labour and policy issues have to be resolved urgently – so strong leadership is now vital if we want to catch the next upturn.”
He adds that stemming job losses is a national priority, and mines can only do this if there is better collaboration in realising the common goal of economic sustainability.
SRK Consulting partner and principal consultant Andrew van Zyl notes that, if local mines want to survive, they need to undergo significant technical and cultural changes. “There is a younger generation of professionals who can do this if they are supported by a conducive and more cooperative environment, but changes in attitude are essential. We cannot keep kicking this can down the road and leaving our successors to solve the sector’s problems.”
He cautions that South Africa’s mature mining industry is not well placed to create more jobs in the future; however, better-paid jobs that demand higher-level skills and technology are on the cards as mines are forced to raise productivity.
A more likely source of future employment growth is the mining industry’s supply sectors, especially those focused outwardly at the substantial unexplored potential in other parts of Africa, notes Wertz. He adds that there are already early signs of renewed interest in Africa among explorers and developers who see the value of preparing well in advance of an economic recovery.
“South Africa’s support sectors, from mining machinery and technology to engineering skills and local experience, have much to offer the continent,” says Wertz, adding that local solutions currently have to address not just the technical demands of mining, but also the broader challenges, such as local economic development, empowerment and migrant labour. “These are common themes throughout Africa.”
As projects become larger and more complex, Van Zyl says, many clients are showing an appreciation for working with South African companies experienced in working on the continent. “These more ambitious projects require lengthy stakeholder engagement and familiarity with different regulatory and policy regimes,” he says, adding that, generally, South African companies have “walked many miles on a mineral journey that some African countries have yet to begin”.
Van Zyl emphasises the developmental potential of successfully exploited bulk minerals in Africa, which demand local, national and cross-border regional infrastructure.
Large mines extracting commodities like iron-ore or bauxite can leverage public and private funding for considerable national advantage, he states. “Public-sector provision of rail lines and harbours, augmented by mine-related products and services from the private sector, leads to positive knock-on effects that ripple through the whole economy.”
Indeed, Van Zyl adds that the constrained financial climate provided much-needed breathing space for mining companies and governments to consider, plan and discuss ambitious mining opportunities – especially those requiring intricate contractual arrangements among many participants.
“A good prefeasibility study, for instance, is not a costly exercise but can lead to huge savings – by helping to optimise a planned operation, by facilitating meaningful negotiations with stakeholders, understanding options should the macro environment change or by preventing the wastage of much greater sums,” he enthuses.