As I put my hand to my keyboard to write my first editor’s comment of 2014 I have to ask myself one overriding question first. What does the year hold in store for the mining industry, globally, and more pertinently, in Africa?
Truth be told, it’s hard to be optimistic considering we have been going through a ‘rough patch’ and a relatively long one at that – which also doesn’t seem quite over, yet. Will 2014 signal the start of a turnaround that I know everyone is rather desperate for?
Let’s look at the facts for a minute – briefly and unemotionally. The general way in ‘which we mine’ has undoubtedly changed with permanency in certain ways. Raising capital is no easy task anymore – lenders are and remain more wary and are not so quick to throw money at just any project. That ‘hush hush’ word nationalism that no one really speaks of anymore hasn’t entirely gone away and may even be on the table in places like Canada and Australia. Metal prices remain, let’s be honest, enough to ensure projects are viable, but not enough to deliver comfortable profits (the reasons for this require a separate column so I won’t go into detail here) and if strikes and wage increases keep escalating as they have in South Africa, the power of our intensive labour workforce will continue to reveal its tripling true colours.
African governments are also getting smarter! You can’t just come in, find a nice deposit, develop and export your metal of choice and make shareholders rich – Africa wants its cut – rightfully so if we’re being honest. This also links nicely with a phrase that has become increasingly significant in our industry, social licence to operate, which means making financial friendships with the government is not sufficient to ensure operational success. Gaining the support of the communities around which you want to operate has become non-negotiable and is the real key to making new mines. It requires massive amounts of continual effort and work to ensure you have the support of the right people and once you have it, to keep it as well.
And let’s not forget about the environment. Mines have been looking after their environments for decades already, or have they? The answer actually doesn’t matter. The reality is that governments want clearly defined, well planned environmental programmes and procedures put in place from planning stage, and nothing short of this will cut it any longer.
On paper, the situation appears as daunting as it actually is and I haven’t even looked at the increase in lower grade deposits, the ‘higher grade’ technology they require financially, or the on-going infrastructure challenges that we are all so familiar with as we move deeper and deeper into unchartered territory.
But, and this is a big but, the point I am actually trying to make is not that our industry is facing a slow death. The projects I have selected as choice projects in this issue will in fact show our robust, adaptive and unwavering commitment to ‘making it work’. What I present to you are success stories, mines that are making it against the odds and they must be saluted.
Finsch for example is no longer working towards closure. Owners Petra Diamonds is investing billions to expand the mine by accessing an entirely new block of kimberlite. Kangala’s development path to production is practically record-breaking – highly impressive for a junior. Namoya, Banro’s second operational mine in the DRC, delivered first gold as promised. Considering this mine’s remote location and required infrastructure, it is nothing short of impressive. The Manica project in Mozambique, which has been sitting on the shelf untouched for years, is finally taking its first steps to production, which we should see in less than two years. Tschudi is entering its development phase as you read this and will deliver world-class technology to a low grade deposit that might otherwise have not been considered worthwhile. And Kalia, an iron ore deposit with huge potential, will likely open the door to Guinea’s mining prospects, and it belongs to a junior.
So, taking all over the above into account, I will attempt to answer my question – what does the year hold in store for the mining industry? The experts are cautiously optimistic yes but I say that regardless of circumstances, our industry is pressing on, putting one step in front of the other and doing what needs to be done. New mines are emerging, expansions are happening and miners are looking for answers and solutions and different ways to getting around challenging circumstances, and they’re doing it! Bring on 2014 – the industry is proving that it can handle the challenges it encountered. And that my mining friends is why I love our industry.
Best of luck for the new year. I hope it is a prosperous one for all of us.