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Mining Indaba wrap-up: The ‘robust debate’

Type of mining-industry TRC planned – Warren Thompson, senior reporter.

SIKI MGABADELI:  And now to wrap up the Investing in Africa Mining Indaba in Cape Town. More than 6 000 delegates attended the annual four-day event, and the theme this year was a focus on long-term investment.

The editor of Mineweb, my colleague Warren Thompson, was there and he’s going to give us a quick wrap of the overall experience. Warren, thanks for your time this evening. If you had to, in one word, describe this this year’s Mining Indaba, what would that word be?

WARREN THOMPSON:  I think it would be robust debate, Siki.

SIKI MGABADELI:  Yes, but that was two words!

WARREN THOMPSON:  Ja, robust debate. The minister promised to have that all-important  legislation which has been the source of so much unhappiness on the part of business concluded by March for the mining charter, and June for the amendment bill of the MPRDA. And then we also had the likes of the vice-president of the Chamber saying this uncertainty is really not conducive to investment.

And the other thing that really came out was that the Chamber of Mines is going to undertake a truth and reconciliation type commission to deal with the mistrust, the kind of source that’s hampering the key stakeholders in the industry from moving forward together. So from that side it sounds quite interesting.

And then obviously on the part of government they’d like to drive the transformation agenda, and they’ve promised to do that through the implementation of the MPRDA Amendment Bill and the new mining charter.

SIKI MGABADELI:  All right. We spoke yesterday to a junior miner and it struck me that often we focus on these big mining companies – this is a centuries-old industry globally – and we forget about the guys who are up-and-coming. Did you get a sense, Warren, being there, that there was any focus on these smaller up-and-coming miners?

WARREN THOMPSON:  Ja, the minister actually did make quite a statement in his speech. He talked about seeing the future of jobs in the industry coming from small and medium-sized enterprises. I think one of the things that can certainly help us is what we’ve seen in jurisdictions like Canada. We have a one-law-fits-all-sizes here, which means that the regulations that apply to the biggest companies also apply to the smallest. And if you want to encourage the junior miners and the exploration, you’d certainly need to make a distinction between the rules that you apply to smaller companies and the rules that you apply to the larger ones. So that’s certainly something we could consider from a legislative process.

And then also obviously the success of the Canadian Venture Capital Exchange, as they call it, is rooted in the fact that you have large amounts of retail investors that are willing to speculate on deposits at an early stage of the mining lifecycle.

SIKI MGABADELI:  This is of course the Investing in Africa Mining Indaba, not just South African mining, How much time was spent on the other countries on the continent?

WARREN THOMPSON:  Actually quite a lot, Siki. President Mbeki was here, I think for almost the entire Indaba, so it was nice to see him. He has been pretty quiet in the time and he was taking a real interest in what was happening. Then obviously many of the ministers from the African countries came through, and there was debate about all the capacity on the political side for natural resource investments. This I thought an excellent idea that allows mining regimes across the continent to compare themselves with one another, and share lessons in terms of what works and what doesn’t work, as well as increasing the capacity of politicians to understand how to regulate these types of businesses.

So very encouraging from that side. My sense is that there’s a lot more activity happening in Africa than there is in our own country at the moment from an investment perspective.

SIKI MGABADELI:  Certainly. The mining sector, we know, is quite cyclical and the minister, when he arrived and delivered the opening address on Monday, said we are entering a summer as opposed to the winter of discontent that we saw last year. So what was he sense about where commodity prices are going this year, Warren?

WARREN THOMPSON:  from my sense, having attended it for the first time last year, there was a much better mood this year. Commodity prices have risen in many regards by quite a lot if you look at met [metallurgical] coal and even iron ore. So definitely a better mood and I think the minister was right. With companies having cut costs and consolidated their costs by restructuring their wage bill, etc, they are a lot leaner and so the fruits of those increased commodity prices have meant that the companies are in a  much better shape and they can go onto the front foot and start making investments and/or acquisitions.

SIKI MGABADELI:  All right, we’ll leave it there. Thanks so much for your time today, Mineweb editor Warren Thompson.

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