After a period of virtual conferencing necessitated by the outbreak of COVID19, the Mining Indaba returned to the Cape Town International Convention Centre (CTICC) under the theme: ‘Evolution of African Mining: Investing in the Energy Transition, ESG, and the Economies.’ Day one concluded with the overarching sentiment that the mining sector in Africa is ‘open for business,’ despite facing a number of headwinds characterised primarily by infrastructural challenges.
Thinus De Vries, Audit Partner and National Head of Mining at international audit, tax and business advisory firm, Mazars was in attendance in this year’s mining Indaba. In his opinion, as South Africa focuses its attention on restoring the damage caused to its economy by the pandemic, “the industry with the greatest potential to contribute towards this regrowth is mining.” But, as he asserts, “within the post-pandemic context and given the unique challenges we face on a global scale around issues such as climate change, investing in mining has taken on new parameters.”
Sustainable mining takes the stage
Among the speakers were South African Minister of Mineral Resources and Energy, Gwede Mantashe and Zambian President, Hakainde Hichilema, both of whom echoed the call for foreign investment into Africa’s mining sector. As De Vries elaborates: “Just a decade ago, ‘sustainability’ and mining were spoken of in mutually exclusive terms. This paradigm however, is rapidly changing. Today, investing in mining and investing according to a sustainable social framework are synonymous.”
According to De Vries, ‘green’ mining is not only the industry’s new frontier, it is its “only frontier.” This viewpoint; reiterated by several of the keynote speakers and conference delegates, served as a segue into discussions around renewable energy sources such as solar and wind energy. “Developments in the renewable energy sector will run parallel to and intersect with technological and social developments in the mining sector. In fact, it is a national imperative that the mining industry play a critical role in the transition to green mining and serve as one of its major driving forces,” asserts De Vries.
Investing in a new and emerging economy through Green mining
As Mantashe explained, the main objective of all industry players at this critical time in history is to strike a delicate balance. This involves weighing up long-term goals relating to the preservation of natural resources, and shorter term goals that are central to South Africa’s economic disposition, such as the ardent need for job creation and greater accessibility to energy.
On this point, De Vries argues that: “Industry role players; particularly those in the private sector, have an unprecedented opportunity to capitalize on what can arguably be seen as a brand new economy – or at least, the next evolutionary step in the economy, which relates to what is sustainable for the planet and for its people going forward. Within this new dispensation, there are a myriad of opportunities to be leveraged and it’s important for both local and international investors to recognise this reality.”
Infrastructure development key to the repositioning of South Africa’s mining sector
Amongst talk of repositioning Africa in the post-pandemic context was mention of the specific challenges that the mining industry faces. The majority of these challenges relate to infrastructural issues, which include; as De Vries explains, “the aftermath of the recent floods in Durban which have rendered many of the ports inoperative. The severity of the floods worsened the state of many of Durban’s ports, many of which were already in disrepair. All sectors need to apply a single-minded focus to getting those ports up and running once again.”
Elaborating on another area of concern faced by the sector, De Vries highlighted that South Africa’s freight railway systems need to be fixed and maintained as a matter of priority. Currently, faulty freight lines are causing entities like the coal, manganese and iron ore industry to shoulder exorbitant costs in order to transport minerals by road. For this reason, he argues, investment into infrastructure upgrades and maintenance will be key to the future of the local mining sector and indirectly, to South Africa’s ability to rebound from dire economic straits.
De Vries also emphasized the importance of solving South Africa’s energy crisis. “We cannot underestimate the effect that loadshedding has had on many sectors; particularly mining, which relies on a constant and stable supply of energy. If we can get a handle on the challenges we face as a nation around energy, we will be halfway to unlocking the full potential of the country’s mining sector. The time for decisive action is now. There has never been a better time to raise South Africa’s status as a force to be reckoned with in the global arena, using the strength of our mining sector as a stepping stone.”