If you chose platinum as your career-defining metal of choice then you’ve probably spent hours regretting the decision that took you down the road you are now walking.
South Africa’s striking platinum sector, the reason for its rapid downwards spiral, is cause for moments of great depression – if I allow myself to get swallowed up in the situation I as a mining journalist am facing and we as a South African nation are living through. It is in those moments I look for motivation to remind myself why our mining sector remains a great contributor to our economy. I can’t lie though; the motivation is becoming harder and harder to find.
But fortunately, I only have to look at this issue of Mining Review Africa to prevent myself from sinking into a half empty glass. Not only have we covered what I consider to be one of the best mining regions on the globe – West Africa – we have also tackled coal. You may question the rationale behind my commodity excitement considering the current weak export prices but in the words of an anonymous poem I found, “Success is failure turned inside out”.
If I were placing bets on lucrative commodities to invest in, I would bet on coal. We all know South Africa is desperate for as much of it as possible to keep the lights turned on but the situation is bigger than that. SRK Consulting SA principal engineer Andy McDonald says that at a global level indications are that coal will remain the largest source of power through to 2035.The World Resources Institute has identified 1 200 coal plants in planning across 59 countries, including 455 in India and 363 in China. In China, where 70% of electricity generation is coal-fired, plans are afoot to almost double the energy output from the current levels of about 1 145 GW in 2012 to 2 000 GW by 2025. (See the full story on page 32). These figures are simply enormous!
And while South Africa’s economy may be struggling (from a mining perspective at least), the same cannot be said for its neighbours. Zambia, Botswana, Namibia, Mozambique and possibly even Zimbabwe are all looking strong with promising new mining prospects. The result however is an energy deficit for all of these countries. It leads to one simple reality – we need more coal! (Let’s not discuss its negative environmental impacts.) Simply put, this is the reason Botswana-focused African Energy Resources has manoeuvred itself into such a good position – choosing to focus not on delivering power station coal, but on delivering energy to the southern African region from its coal instead. “Our export product can wait for the next 18 months at least,” says the company’s MD, Frazer Tabeart. With a mining licence situated in Botswana just outside of South Africa, the company is keen to engage with Eskom and deliver power to it.
Could this also be the reason a junior such as Universal Coal has successfully delivered its first coal mine, in South Africa, in record time? There may be only one buyer in the country but it’s a hungry buyer nonetheless. Just make sure your BEE credentials are up to scratch and your coal will be scooped up off the market.
If you are not keen to get your hands dirty – literally – then I recommend making your claim to fame somewhere in West Africa. Wow, that region is buzzing! Whether you find this surprising or not, most West African governments appear to have a really ‘good grip’ on encouraging international investment and the benefits can clearly be seen. There are already hundreds of mining companies scattered across West Africa, all with attractive and potential projects, all working towards taking them up the value curve. Surely hundreds of companies can’t be wrong? Companies like Endeavour Mining (see story on page 12) are already proving success is out there for the takers.
Miners, these are exciting times after all! Just be sure to place your commodity bets wisely!