Call to free up small mining firms from Charter statutes
AS the decline in SA’s gold and platinum mining sectors continued, the best way to revive the country’s moribund mining industry was to unshackle junior exploration and mining companies to unlock the country’s mineral wealth.
There was a growing chorus for junior miners to be released from obligations imposed on the sector by the Mining Charter, which were seen as onerous and crippling for small companies scraping together enough capital in a difficult market to explore for new deposits or to start small-scale mining operations, said John Bristow, a geologist and champion of the junior mining sector.
There was a need to set up a junior mining chamber outside the auspices of the Chamber of Mines, which was regarded as the voice of large, established mining companies, despite its efforts to grow its junior mining membership, he said.
“By developing a strong junior sector, something we’ve not had in decades, we can knock this industry back into shape. A strong junior exploration and development sector will provide opportunities to create real black ownership, drive exploration, make new discoveries and create blackowned mining companies.”
If the fall in numbers of selffunded junior alluvial diamond miners was used as a barometer for the sector, then the extent of the problem was self-evident.
In 2017, there were 150 small alluvial diamond miners that employed 3 000 people, down from 2 000 mining companies employing 25 000 people in 2004, data from the South African Diamond Producers Organisation and the Global Diamond Network show.
The dearth of exploration could be evidenced by the fact there had been no major mineral discovery since Venetia, SA’s major diamond mine, in the 1980s, Bristow said.
Bernard Swanepoel, chairman of the Small Business Initiative, has also asked for junior companies to be excluded from provisions in the charter, sending a document outlining the reasons to the participants in negotiations around the formulation of a new charter.
“The cost of compliance, red tape, lack of finance, the time it takes to get a mining permit and lack of infrastructure makes it difficult for junior miners to enter and stay in business,” the document says.
“The charter should not be an extra barrier to entry in this regard but should be a catalyst for junior miners to grow the industry. Junior miners should … be exempt from requirements of the charter in order for the junior sector to grow.”
Bristow said that there were smaller deposits of industrial minerals, clay, base metals, coal and chrome that would suit small companies. The industry had to move away from its fixation with gold and platinum, which have formed the backbone of SA’s mining sector and now have high barriers to entry.
Bristow suggested one model to unlock SA’s mineral potential was to copy a proposal made by Chile’s mines minister, Baldo Prokurica, who wanted to reinvigorate that country’s mining sector.
Prokurica’s idea was to formalise an informal plan to encourage major miners to let junior exploration companies onto their tenements.