RALF HENNECKE The pressure is building for the mining sector to re-set its production capability in the face of growing future demand
An important focus of this year’s Investing in African Mining Indaba – to be held at the Cape Town International Convention Centre from February 6 to 9 – will be security and supply, and with good reason, says Omnia Group company BME MD Ralf Hennecke.
He says the pressure is building for the mining sector to reset its production capability in the face of growing future demand, especially in those minerals that are critical to global decarbonisation trends which will require more exploration and mine development in the long term, and will demand more predictability and efficiency across the value chain.
“The coming year will continue to bring challenges with regard to mining supply chains around the world. These obstacles have their origins in the economic lockdowns during the Covid-19 pandemic but have been compounded by the Russian invasion of Ukraine and the related disruptions,” says Hennecke.
He adds that this has brought home the importance of secure supply chains in key inputs like explosives and blasting technology, on which mines rely to meet their daily output targets.
PwC’s yearly insight report ‘SA Mine 2022’ has also recently raised similar concerns about whether South Africa and other resource-rich countries will benefit fully from mineral demand growth. This will depend, argues PwC, on their ability to address bottlenecks in supply and mine-to-market infrastructure.
“As BME, we are always dealing with supply chain disruptions caused by a range of factors from weak infrastructure to border efficiency. Our success in serving customers stems from ongoing investment in local infrastructure and skills, to strengthen local supply chains,” says Hennecke.
Moreover, closer collaboration between mines and their supply partners is a key ingredient in building future stability in the sector, he asserts.
Beyond supply chain issues, the pursuit of efficiency in mining remains a vital theme as efficiency is directly relevant to energy saving efforts for decarbonisation, as well as for unlocking opportunities to gradually increase production levels.
“The digital age offers mining supply companies the ability to continuously develop our productive technologies. In our field – blasting and explosives – we have seen the significant impact that our technological development can have on mine safety and productivity, for instance,” adds Hennecke.
He highlights that these efficiency improvements are important to the long-term sustainability of the sector as they improve the commercial viability and longevity of every project.
Greenfield projects to produce key commodities are scarce, he points out, and minerals such as nickel, copper, cobalt and platinum-group metals are likely to experience supply shortages if new projects are not initiated soon.
“It has become clear that more exploration – in battery minerals particularly – is going to be necessary to meet the needs of a lower carbon global economy. Being a high-risk endeavour, exploration needs optimal levels of confidence from the investment sector, so every efficiency gain will help,” Hennecke concludes.