Exploration dies in SA, booms elsewhere

Without exploration, mining has no future.

The real drag on mining investment is a hostile relationship between those who provide the capital for new projects and the government. Some of Mining Minister Gwede Mantashe’s predecessors were dreadful, with no understanding of the business of mining.

Mantashe, to his credit, introduced the new Mining Charter and killed off the one clause that would have euthanised mining in SA: the requirement that mining companies had to keep topping up BEE shareholders whenever the old ones sold out.

But still investors steer clear of SA exploration. Australia, Canada, Mali and Ghana have no such problem. John Welborn, CEO of Australia’s Resolute Mining, says its launching a fully automated gold mining operation in Mali.

US mining group Barrick has acquired Randgold and is now headed by SA mining stalwart Mark Bristow.

Peter Leon of Herbert Smith Freehills’ Africa group, says part of the problem is the clunky SA Mineral Resources Administration (Samrad) system, which takes a year or more to process a mining exploration application. In Brazil, Mozambique and Ghana licence applications are typically approved in weeks.

Brazil and Ghana effectively removed licensing to improve efficiencies and turnaround times.