Engineering & Mining Journal

MAR 2017

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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MINING INDABA 2017 50 E&MJ • MARCH 2017 www.e-mj.com Cape Town once again welcomes miners and bankers to the annual Indaba, an event characterized this year by optimism that the industry is headed for recovery. Miners Seeing Signs of Improvement in Africa Cape Town investment conference finally hears optimism after several gloomy years By Gavin du Venage, South African Editor Plenty of gardening talk happened at this year's Mining Indaba, with bankers and miners largely agreeing that green shoots of recovery had appeared and a commod- ity spring was under way. The annual event held in Cape Town, which claims the title of the world's larg- est mining investment event, has been a gloomy affair for the past three years. This time around, however, a cheery mood in- fused the conference as the commodity recovery seemed to gain momentum. "The industry is coming back," the new CEO of the Indaba, Alex Grose, said in his opening address. "We can look ahead with some optimism that the up- turn is sustainable." The event itself had undergone sever- al changes, he noted. Entry fees, long a source of contention, had been cut by up to 50%, and for some attendees waived altogether. Also, more focus was on Africa rather than just on the host country. The result was a 70% increase in attendance. "You spoke to us, and we listened," Grose said. South African Minister of Mineral Re- sources Mosebenzi Zwane took up the theme of a nascent commodity recovery in his keynote address. "Last year, we re- flected that we were in a winter, and that we must prepare for spring," Zwane said. "Now spring has arrived." Zwane said mining would continue to be the pillar of the economy, and that the country still had $3.3 trillion worth of un- mined reserves. However, emphasis would be put on spreading the wealth and the gov- ernment would push ahead with efforts to increase black participation in the industry. To this end, the long awaited amended Mining Charter would be published this year. The charter has been long in the works and is highly contentious, impos- ing as it does new levies on mines and enforcing procurement targets. For in - stance, the charter proclaims that no less than 30% of the industry's total goods and services should be procured from black-owned and controlled businesses — entities that largely do not yet exist. A looming court challenge to the char- ter has brought relations between Zwane's office and the industry to an all-time low, but the minister called on the mines to "engage" with his office to clear up is- sues. The charter comes at a difficult time for local miners. According to the Chamber of Mines, mining production data confirmed the fear that the sector would contract by 5% during 2016. In spite of the shadow the charter cast over the South African miners, most felt better times lay ahead. Mark Cutifani, CEO of Anglo Amer- ican, said he, too, noticed a change of mood among colleagues, and that Indaba attendance was up. "I really enjoy being here this time of year, when others up north are freezing," he said, in reference to the balmy summer Cape weather. For the company he leads, the worst is now behind it. "The past two years have kept us on our toes, but we've seen some reprieve," he said. Now that commodity prices are strengthening, the industry needs to learn from the "dark days" and make changes. This includes finding new- er methods to mine, especially for South Africa's deep level operations. Anglo, he said, was working toward a waterless mining strategy as most of its operations were in dry areas. Already, the company was approaching a nearly 80% recycle rate. According to Bloomberg, with mining at its peak in 2011, the global mining in - dustry was worth around $2.5 trillion. A rapid slide in commodity prices led by a slowing Chinese economy saw it rapidly tumble, and by 2015 it was valued at less than $1 trillion, less than the combined worth of Google and Apple. If mining companies hoped to make the most of a recovery, they would need to avoid the mistakes of the past, said Mark Bristow, CEO of Randgold Resourc- es, a London-listed company worth around $7 billion. Bristow has been scathing in

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