Modern Mining March 2022

“Exploration is the life-line of the South African mining industry. The Northern Cape, in particular, contains many minerals that are being used in the development of new 4IR tech- nologies and is an area that currently requires significant investment,” says Mitchell. The JEMD put forth proposals to National Treasury in late 2020 advocating for the adoption of the Canadian “flow through share” tax incentive model to stimulate explora- tion spending. “A number of major law firms assisted us on a pro bono basis to ensure that the proposal was not merely an idea, but a well-crafted document tailoring the Canadian model to our tax regulatory system. In addition, a team of economists

looked at the economic impacts of exploration activity on the fiscus. To date, there has been no indication that Treasury will adopt this system. However, the model is in place should government choose to go this route.” The JEMD has also been a part of the Exploration Revival Task team which comprised the DMRE, the Council for Geosciences, and the Minerals Council. The team drafted the Exploration Implementation Plan which was finalised in January last year. “The plan is yet to be released for public review. In his 2022 State of the Nation Address President Cyril Ramaphosa referenced the exploration strat- egy, reporting that it would soon be released. The Minerals Council and its members are keen to see the strategy enacted as it will kickstart this important sector of the mining industry.” The JEMD’s efforts have also extended to assist- ing the DMRE draft specifications for the new Mining Cadastre system which replaces the dysfunctional SAMRAD system. According to Mitchell, a request for a ‘bespoke’ model to be built from the bottom up in which all parts of the application process would feed into a ‘one-stop shop’ was released by the DMRE in August last year. The intention is to ensure that the new model will streamline the application process. “The Mineral Council’s view is that it would be better to adopt an off-the-shelf internationally proven system, however we will wait to see who wins the tender and how they propose to proceed imple- menting it. Our concern is that any replication of the SAMRAD system could take years and be equally dysfunctional when proven systems are already available for rapid, efficient implementation.” Despite these challenges, Mitchell is of the view that there is a strong appetite for investing in the local mining sector given the great mineralisation that South Africa holds. “The Northern Cape, for

example, is a treasure trove of minerals, particularly those such as zinc, manganese and copper used in new energy technologies. However, to attract inves- tors, our regulatory regime needs to be streamlined and modernised. The Prieska copper/zinc project in the Northern Cape run by Orion Minerals is an exam-

Many smaller empowerment companies have entered the mining industry through coal mining.

ple of a new investment into the mining sector. This is particularly pertinent as it is a junior mining company that plans on invest- ing in Greenfield exploration – a critical component for a longer- term growth of the South African mining industry.” In his 2022 SoNA, President Cyril Ramaphosa announced the appointment of Sipho Nkosi

Conducting and unpacking research for our members helps us to better understand the sector and become more effective lobbyists – Mitchell.

to head up a team to cut red tape across govern- ment. Great news for the mining sector which has long been lobbying government in this regard. 

Energy metals – are they attractive to junior miners?

 Minerals that support new energy technologies such as platinum (fuel cells), copper (solar PV systems) manganese and nickel (batteries) are abundant in South Africa and well within the ambit of exploitation by the junior sector.  According to Mitchell, the smaller deposits are ideal for juniors as larger producers’ economies of scale preclude mining smaller deposits.  “Aside from PGMs remaining critical for hydrogen fuel cell applications, both in the manufacture of hydrogen and the fuel cells themselves, coal continues to be an attractive commodity for the junior mining sector, this despite a strong international lobby which is pushing for the abandonment of coal as an energy source. Coal will continue to be part of the energy mix in South Africa for some time, but in the longer-term it is no longer a viable energy source. It is important to note that many smaller empowerment companies have entered the mining industry through coal mining – in fact, the majority of our junior members are in coal,” says Mitchell.

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