Modern Mining May 2024

refine and sell gold and copper. These commodities tick all the right boxes, unlike bulk commodities, such as iron ore, chrome and manganese, which face massive logistical challenges.” Commodities performance While gold has been a star performer, trading at well above $2000/oz, battery metals have lost much of their shine, with lithium proving to be volatile and experiencing a massive price drop from its high of $80 000/t to $12 000/t over the past 12 months. “PGMs, nickel and cobalt have also slid over 60% from their highs. Why are the prices of these minerals, used in battery metals and electric vehi cles and touted by the pundits to skyrocket, falling? Is it because these commodities ran too far ahead too fast? Is there more in the supply pool than initially thought,” he questions. According to Major, whereas demand is immedi ate, supply can take months or years to catch up and by the time supply does catch up, “demand isn’t as great once new supply reaches the market and this subsequently leads to a decline in the price of that particular commodity. “Even though key commodities, such as nickel and cobalt, underpin the drive for clean energy, the prices of these commodities have not held up nearly as well as anticipated.” Major says that an increasing number of miners are selling the by-products from their primary mining sources, which is having an adverse impact on some operations. “Indonesia is now recovering nickel from its iron nickel deposits, which has put primary nickel produc ers out of work. This is the same scenario faced by miners of pure silver mines in Idaho, as miners in Mexico and Peru, who mine base-metals that pro duce silver as a by-product, are now selling silver into the market. This has devastated the pure silver mines of Idaho, which now lie idle.” Attracting mining FDI Africa is rich in resources, resources the world needs, but does the continent offer foreign inves tors ease of investment? “Investors are like kids with money – they are looking for easy opportunities to grow their wealth and mining majors, and juniors alike, are happy to explore for minerals in Africa. But many countries on the continent, particularly South Africa, make doing in-country business really challenging.” According to Major, countries in Africa need to take a leaf out of the Canadian and Australian way of doing business. “Both these countries encourage mining compa nies to explore, mine and beneficiate. In fact, Canada arguably has the best exploration databases in the world. This is how Canada adds to its coffers and

Bulk metals (coal, iron ore, manganese, chrome) face logistical challenges.

miners are happy to do business in Canada because of the ease with which one can do business there.” South Africa and Zimbabwe, on the other hand, which were once the darlings of foreign investors because of their wealth in key commodities such as gold, silver, diamonds, platinum and manganese, have such investor unfriendly poli cies and challenging operating environments that they now deter investors. The dire rate of new mines and valuable prospecting operations these past 20 years attests to that fact. 

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