The attrition in mining projects over the past few months has been notable, though perhaps not unprecedented. Particularly hard hit has been the base metals sector, with high profile copper and cobalt projects being suspended in central Africa. This includes suspension of all mining activity by Camec at its Luita project in the DRC, the shut down of First Quantum Minerals Bwana Mkubwa facility in Zambia, and the suspension of concentrate production and the initiation of care and maintenance at Anvil Mining’s Dikulushi mine in the DRC. The list goes on; Katanga Mining suspended operations at its Tilwezembe open pit mine and it halted ore processing at the Kolwezi concentrator, while in Zambia Luanshya copper mine (LCM) has suspended development of the Muliashi project and Zambia’s largest cobalt producer Chambishi Metals has stopped production because of lower metal prices. Nickel miner Albidon was looking at closing its Cape Town exploration office and its Lusaka corporate office.

At the same time the suspension of some projects is good for the projects that have the resilience to continue, and in many cases the suspensions of projects will probably only be temporary. The fact that the steep decline in commodity prices and demand was not due to the commodities sector per se is a good thing, and the rapid cut-back by producers ranging from ferrochrome smelters to platinum mines is a good sign.

It reflects the truism that the cure for low price is the effect of low prices. The industrialisation of a large portion of humanity is not over, just slowed for a while, and the demand for commodities will return. Over the long term, the super-cycle is not over. This is a blip; how big and how long a blip, we shall see.

Not all commodities have been equally hard hit. Ferrous metal industries and base metals prices such as nickel, cobalt and copper, as well as those of the platinum group metals have been hammered. But gold has remained resilient, to some degree living up to its reputation as a secure haven in times of financial distress. Who would have predicted the gold price would trade within the same range as the platinum price, as happened toward the end of 2008? Demand for coal, in South Africa in particular, will see that commodity remain resilient and the uranium story remains as valid today as it did six months ago.

Another good sign is that in general the mining industry has responded with alacrity, cutting production rather than exacerbating the slowdown by trying to maintain output. It means a faster recovery and a stronger base from which the mining industry can build again. The slowdown has also had other benefits, reducing pressure on skills and resources, reducing costs for those projects that are going ahead, not to mention reminding governments across the world that they can only go so far in the burdens they look to place on the geese that lay the golden eggs.

The longer term picture for Africa’s mining sector remains promising and those companies that can come through this short to medium term phase intact will be all the stronger for it.