Mining Indaba preview
Rolland Kuchocha: managing partner, TumbleVesT
Investors should not regard the lack of
infrastructure as entirely negative or as
a burden. On the contrary, it is precisely
because there hasn’t been sufficient
infrastructure that the resource has been
precluded from being discovered before.
Investors in mining must put up with
this and find ways of closing the
infrastructure gap. This can be done by
supporting renewable energy generation,
roads, rail, communications, investing
in processes that conserve water and
more importantly, the sharing in these
improvements with the communities in
which they are operating.
From the ashes of Robert Mugabe
who, for 38 years, could not give any
policy consistency or regulations devoid
of self-interest centred on his family,
Zimbabwe is on the rise again. The talk
from the new rulers is encouraging, and
they have started walking this talk by
removing restrictive local shareholding
requirements. It appears that indeed
‘Zimbabwe is open for business’, as
the structures for long-term investor
confidence are being built, block by block.
The country has large platinum reserves,
coal resources, coalbed methane potential,
many small gold mines, and other minerals,
which with the correct model, can unlock
the country’s wealth while giving good
returns to the foreign investor.
The mining industry has a great future in
Africa. Africa is still home to vast reserves
of iron ore, gold, platinum, uranium, oil,
and gas. I believe that the continent is yet
to be saturated in exploration, as most areas
remain unexplored. This is a good time, as
there is a general recovery of commodity
prices. Africa’s time is now!
Rolland Kuchocha.
Other countries on the rise may include the
DRC and Angola. The DRC’s potential as
such a huge country is almost unlimited,
while Angola could eventually take its place
as a major mining destination in Africa. Early
indications are that the new leadership is keen
to bring order and remove personal wealth
accumulation by the connected ruling class.
According to the Mining Journal’s recently
published World Risk Report, a number of
countries such as Burkina Faso, Guinea,
Mali, and Mozambique are improving
their risk ratings and attractiveness to
mining investors, while others have become
less attractive as investment destinations.
The new year, therefore, holds
considerable potential for many African
countries, especially where investors
have active support from their own
governments in terms of strong and
enabling relationships with the African
countries in which they want to invest.
It should be remembered that the
average risk rating for the mining
sector in Africa showed a slight
improvement last year, and the continent
is still considered less risky for mining
investment — on average — than Asia.
The technical risk generally remains
more important than political and
www.africanmining.co.za
regulatory risk in the life of most
mining projects. It is no simple matter
to find suitably experienced people to
study, plan, and implement a mineral
project in a remote region of Africa; if
the right technical skills and sources of
good advice are in place, many of the
other risks can be effectively managed
to ensure the sustainability of the
operation. Larger companies operating
in multiple jurisdictions benefit from
a portfolio effect that provides some
insurance against adverse events.
It is important that companies focus on
risks that they can address — generally
through technically excellent solutions
that can be developed by experienced
staff and consultants, and which is a
focus of SRK. Power generation in
remote areas will remain a challenge
in the short term but there have been
some interesting applications of hybrid
electricity generation schemes at mines,
such as integrated solar and diesel
Andrew van Zyl: partner and principal consultant, SRK Consulting
Andrew van Zyl.
power installations. While leveraging
renewable technology in small-scale
local energy facilities, mines can also
save considerably on the transportation
and logistics costs that come with using
diesel fuel for generators. While these
facilities will undoubtedly become
more common on mines, it will take a
significant step in battery technology
— to provide greater on-site energy
storage — to really mainstream the
reliance on renewable sources in localised
applications.
JANUARY - FEBRUARY 2019 AFRICAN MINING
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