Johannesburg, 2 September 2024:
The focus of the Jo’burg Indaba 2024 is Investing in Resources and Mining in Africa, with major players in the supply to and support of the industry in attendance.
As of 2023, the mining industry contributed around 202.1 billion South African rand to the country’s GDP and employed a total of 477,000 people. However major mining houses have started to close mining operations and focus investment outside of the country and the industry has seen thousands of jobs shed with the latest quarterly figures released in September, indicating a further 7000 jobs lost in the sector.
There have been numerous headwinds faced by the industry including poor rail transport infrastructure and electricity grid outages that have plagued the industry’s production for decades.
Beyond this, the global mining industry faced a big hurdle in 2023 with the financial performance of the world’s Top 40 mining companies being squeezed by falling commodity prices and rising production costs.
Global revenues fell more than 7%, despite increases in the production of key commodities. 2024 looks to see a continuation of these trends, marking the very first time since 2016 that industry revenues may see a drop in consecutive years.
In 2023, the prices of lithium, copper, nickel and cobalt also fell sharply, as portions of the slow supply response came on stream while demand growth was temporarily stunted.
In South Africa, there has now seen 188 days of zero power outages, and according to Eskom’s Chief Executive, Dan Marokane, Eskom now has sufficient base-load energy supply to ensure a stable grid and power supply to support growth in the industry.
The improvements in electricity supply should see sectors such as Chromium and PGM mining production improve.
The improved business conditions, including the imminence of the much awaited minerals cadastre, promised by the government, are some of the topics in discussion at the Joburg Indaba conference, which kicked off this morning. The Cadastre is a comprehensive system that manages and records information related to mineral rights, permits and licenses in the mining sector. It functions as a portal that displays a country’s mineral resources and energy management, ensuring transparency and efficiency in the allocation of mining rights.
This step is seen to be a critical step in ensuring future investments in mining in the country as it would eliminate irregular granting of mining rights and provide stability to the industry that would encourage new exploration programs.
South African minister of Minerals, Gwede Mantashe is scheduled as the final speaker at the event on Thursday afternoon after missing the event in 2023, so that he could focus on national elections. This however also raised questions about the minister side-stepping the event to avoid having to provide reasons for his department’s failure to implement the cadastre.
Other speakers today included Adv. Michelle Phillips, the Group Chief Executive of Transnet, who stated that while there have been improvements in Transnet there are still massive challenges that need to be overcome to provide a working network that will support the mining industry.
Phillips says that as far as timelines are concerned, “we need five years to fix the infrastructure but we do not have five years to do it in”. This has meant that they are looking closely at how they can compress the timelines and are looking at a number of projects that can be activated now. They will be looking to sell-off non-core assets, as well as looking at private sector partnerships so that they can fix the long-haul, heavy lines that the mining industry requires to move their ores and products.
There appears to be a definite shift in policy and in approach by the authorities and a more collaborative attitude towards working with the private sector to solve the challenges that have been holding back the growth of mining in the region.
