Modern Mining June 2023

JUNIOR MINING

Junior mining producers attract investment while exploration juniors do not

Despite the overwhelming challenges that junior and emerging miners face in South Africa, the sector has done ‘disproportionately’ well when compared to the rest of the mining industry, says Junior and Emerging Miners Desk lead, Grant Mitchell.

“ C alculations from our economics team indi cate that on the back of the commodities boom, there was an improvement in the income quantum that junior producers con tributed to the local mining industry. In fact, in 2022, the annual revenue generated by junior producers was R88bn, while the rest of the sector contributed R1.2 trillion. Even taking inflation into account, this amount is a massive jump from the R54 bn contrib uted in 2018.” The top revenue earners for the junior min ing sector have been platinum (R19.6 billion), coal (R17.2 billion), gold (R6.3 billion), manganese (R3.4 bil lion), chrome (R2.3 billion) and diamonds (R1.8 billion) according to Bongani Motsa, a senior economist at the Minerals Council. According to Stats SA, the mining industry employed 464 615 people in 2022. In line with this

boost in revenue, the junior sector amped up the number of people it directly employed to between 34 846 (7,5%) and 41 815 (9%). Junior miners target lucrative local opportunities. According to Mitchell, the history of mining in South Africa follows a two-tiered system, consisting of mining majors, many of whom have transitioned to multinational status and the smaller end of the mar ket, which consists of emerging and junior miners, including companies that are under the umbrella of the Aggregate and Sand Producers Association of Southern Africa ( ASPASA ). ASPASA currently con sists of more than a thousand member companies. Given that mining majors have deep pockets and thereby extensive budgets, they often overlook smaller projects, which are just the right pickings for small scale and mid-tier producers. And while there remains a vast number of small to medium size projects still up for grabs, new age minerals have become the springboard taking juniors miners to mid-tier miner status. “As mining majors with massive financial muscle chase after larger more lucrative investments in destinations across the globe, smaller local projects have become money spinners and the life-blood for junior miners. This is more the case with green energy projects, which have become increasingly popular and just up the ally of the junior mining sector.” The lean and agile sector has been quick to spot opportunities in high demand new green tech nology and battery metals segments, going after

Over the past two decades mining exploration investment has been on a downward spiral.

Last year junior miners generated R88bn in revenue.

20  MODERN MINING  June 2023