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South Africa Looking to Increase Mining Investment

THE CONFERENCE CALLER: The reinvigoration of South Africa’s beleaguered mining industry is hoping to attract new investment of more than $11 billion, or around 122 billion rand, over and above current project commitments.

The outlook was posted on the second day of the three day Paydirt 2018 Africa Down Under mining conference in Perth by the chief executive officer of the Minerals Council South Africa, Roger Baxter.

Recognising that the minerals rich country had not reached its full mining potential in the past decade, Baxter said key findings of an industry report last year for change and now backed by government, pointed to a much stronger outlook if implemented successfully.

“The current mining capex for the next four years for South Africa is R145 billion,” Baxter said.

“Potential new capital expenditure under a more certain and conducive environment would add a further R122 billion (A$11 billion plus) to this outcome.

“This is 84 per cent higher than current commitments.

“Our findings last year showed that most companies had held back investment due to South Africa’s then mining policies and uncertain regulatory environment.

“This dampened outlook also included certain minerals, due to adverse economic conditions.

“But our modelling has also shown that if South Africa gets back into the top 25 per cent of favoured mining investment destinations globally, this would create a further 200,000 jobs.

“It would profound positive impacts on South Africa’s minerals supply chain, export earnings, taxation contributions and ultimately, the much desired transformation of South Africa’s mining industry to where it should be, given its mineral wealth.”

The Minerals Council chief said reforms enacted this year were showing green shoots for the industry, and would come to a head with a proposed international investment summit in November this year.

The only thorns among the green shoots included anxieties around talks on land expropriation without compensation and the agreement yet on a satisfactory Mining Charter.

Baxter acknowledged that South Africa’s once internationally renowned mining reputation, had, “been through a tough patch”.

“From 2013 to 2017, real net capital formation in South Africa’s mining sector declined by 50 per cent,” Baxter said.

“The investment pipeline has also been weak – the country attracting just one per cent of total global exploration expenditure last year compared to 14 per cent for each of Australia and Canada.

“Of the South African exploration allocation, only 10 per cent of that was on greenfields activity – meaning a much weaker and limited pipeline of new mining projects being developed.”

Baxter said the Minerals Council believed the economic and transformational potential of mining in South Africa was huge – and an invigorated best practice approach could see mining investment double in just four years.

 

Ghana Keen to Shift Focus to Industrial Metals

THE CONFERENCE CALLER: One objective of African mining powerhouse, Ghana, is to bring about more sustainable extraction of its mineral wealth.

Although it is starting to deliver on this, the country is determined to diversify into non-traditional mining areas.

Speaking on the second day of the three day Paydirt 2018 Africa Down Under mining conference in Perth, Ghana’s Deputy Minister for Lands and Natural Resources, the Hon. Barbara Oteng-Gyasi, said that for the past two and a half decades, the country had attracted mining sector investment to the order of US$18 billion.

“This has contributed to a trajectory growth in our gold production in the opening half of this year, a provisional 2.4 million ounces compared as against 2.1 million ounces in the first half of 2017,” Ms Oteng-Gyasi said.

“Production of manganese in the same comparable periods rose to 1.9 million tonnes against 1.3 million tonnes previously.

“Such performances are indicative of the success of our strategy to ensure sustainable extraction of Ghana’s mineral resources through more intensive monitoring of mining activity to ensure environmental compliance, improved technical capacity of our small-scale miners, and decentralising government regulatory processes.

“Not surprisingly, our mining sector has contributed strongly to Ghana’s overall provisional growth in GDP with the mining-quarrying sub-sector recording the highest year-on-year quarterly GDP growth rate in the Q1 2018 this year.”

The Deputy Minister also noted the Government was focused on better integrating the mining sector into Ghana’s economy and value-add opportunities, including mining related industrial processes, and wanted to reduce any over-dependence on traditional minerals.

Ghana has historically been a major African producer of gold, manganese, bauxite and diamonds.

The current focus is to build an integrated aluminium industry from bauxite deposits in the country.

However, the move to wider opportunities would now include intensified exploitation of Ghana’s industrial minerals, including solar salt, granites, lithium, and base and clay metals.