Miners migrate north to tap into Africa’s resources
AFRICA remains the final frontier awaiting more exploration and investment — and South Africans are among the trailblazers in the charge towards new opportunities to the north.
Schalk Venter, CEO of AEL Mining Services, says that wherever established mining activities are in progress, mines eventually discontinue operations because they reach the end of their life cycles. Reinvestment capital is often too high and ore bodies are no longer easily accessible or financially viable to mine.
“But even if global or regional economies and demand for commodities go through cycles of highs and lows over many years, mines that close need to be replaced. The good news is that much of that replacement volume will be in Africa,” says Venter.
“Africa is open for business, especially mining. And because of improving infrastructure, there is access to those areas of exploration. Ore bodies have been identified and are available for mining.”
AEL Mining Services is a supplier of explosives, initiating systems and a range of related services to the mining industry.
Venter says that SA has been involved in mining since the late 19th century “and some of the biggest global mining companies have their roots in SA”.
He adds: “South African suppliers to these mining companies have learned their trade here with their customers over decades of mining activities — and as those customers migrate north, we follow them.
“Our customers know our products, our people, our ways and our service culture, and we’ve got the development know-how to take that into Africa. We’ve been through the years of sanctions in the 1970s and 1980s — and we’ve developed innovative ways to serve our customers in an open economy and compete outside of SA.”
Deposits in Africa are more accessible, he says, in what are predominantly surface mining projects, where the older and more established mines in SA focus on deep-level mining. Some of these mines are struggling because of the unpredictability of commodity prices and the high costs associated with deep-level mining.
In the rest of Africa, Venter says, minerals traditionally offer good prospects. Coal, iron ore, diamonds and copper are among the main minerals — as well as gold in West Africa because of the shallow nature of the deposits.
Coal — especially thermal coal — is also exported to the East, as is copper. About 70% of the volumes of mined copper go to China.
Within SA, many of the mines are still mining at depth, while there has also been diversification into more surface mining of iron ore and coal. The trend away from deep-level mining has also been a learning curve for South African supply companies, says Venter, moving from deep narrow reef mining more towards providing a technical service “front-end” at the customer’s mining operations to help open cast mining companies to unearth wealth.
He says Africa as a whole is more politically stable than it was 20 to 30 years ago. There has also been infrastructure development in areas such as telecommunications and roads, as well as the supply of utilities such as energy and water.
But the shortage of skills and adequate logistics structures remain some of the challenges in doing business in Africa, he says.