Modern Mining June 2021

also playing a strong role. Regions such as North America, Latin America and Australia are at an advantage due to the natural occurrence of battery minerals and metals,” adds Möncks. The third element, adds Möncks, speaks to the overall risk that inves- tors take with their exploration in a specific country. For example, the levies and taxes they have to pay, the requirements they have to meet and the security of their tenure – if the exploration is over a long period. “It’s a combination of these three fac- tors that makes a region less or more attractive to investors. Unfortunately, countries in the southern Africa region are not satisfactorily meeting

one or multiple of these three factors and therefore find it challenging to attract exploration investment,” he says. In terms of the risk investors take and the require- ments they need to meet, Möncks believes that South Africa is moving in the right direction with regards to regulatory certainty. “However, the Mining Charter is not law and can be changed at reasonably short notice, for example in terms of tenure and how long companies have access to deposits, which can impact exploration investments negatively. South Africa is challenged, to some degree, on all three factors – but has substantial opportunity to continue the recent positive trajectory,” says Möncks. The outlook Commenting on the outlook, Gilbertson says the exploration industry could be in for a bumper five years or so if supply changes are well managed and if investors are kept well informed. “The quantum of commodities required to fuel the 4 th Industrial Revolution is huge and supply will ultimately have to rely on exploration. The challenge for southern Africa is to secure its piece of the explo- ration pie,” says Gilbertson. Möncks is reasonably optimistic about the future of mining in South Africa and the region at large. South Africa, he says, is moving in the right direc- tion and there are strong signals that the country will continue to do so, specifically relating to the stability of the Mining Charter and the willingness and awareness of government in terms of base exploration. “These two elements are signalling to the mar- ket that the country has a conducive environment for exploration and investment. However, this is subject to the deposits that can be found in the ground as well as investment required in the cur- rent known resources and reserves like platinum, palladium and gold. Given that those materials have

a solid outlook we expect exploration investment to materialise,” he says. “Beyond the three factors I mentioned earlier, there are a plethora of other aspects to look at besides exploration, including operations – the avail- ability of talent and electricity. On all these fronts solutions can be found, for example the self-gen- eration of electricity and the special electricity tariff applications that the country has opened up so that mining companies can apply for lower, stable elec- tricity rates under certain conditions. These moves will help to improve the perception of South Africa as a challenging mining environment and address the concerns of investors,” he says. By marketing and communicating these changes more actively, adds Möncks, government and key industry stakeholders can change the international perception of the country and position South Africa as an attractive investment destination. For the rest of the region, Möncks says the DRC has some interesting endowment including copper and cobalt, as well as gold deposits. “The challenge, however, is the unstable policy regime, environmen- tal and social concerns, and to a lesser degree, the lack of geo information,” concludes Möncks. 

Globally, greenfield exploration has experienced a significant dip, with the majority of efforts centred around existing projects.

Key takeaways  Southern Africa’s reputation on the global stage is that of a mature mining sector with limited exploration potential  The region has significant endowment and potential endowment, but there is uncertainty in terms of the quantity, quality and how accessible the endowment is  As with the industry at large, however, speculative investment in explora- tion is increasing into 2021 – at least in some commodities such as gold and those seen as critical metals  The growing importance of ESG within exploration is being felt, requiring investors to rethink their approach in the commodities sector. This is slow- ing down investments in the short term

June 2021  MODERN MINING  25