There is also a new trend in the mining industry where majors are divesting out of emerging markets like Africa. AngloGold from gold assets in Ghana, BHP iron ore assets in West Africa, Norilsk nickel assets in South Africa.
This provides opportunities for junior miners to invest and create space for indigenisation. However, funding for mining projects remains a challenge as commodities prices continue to plummet to new lows. In some instances, the new entrants do not have experience in running the mining operations at efficiencies required to remain profitable.
In South African the Minister of Mineral Resources has assured investors and stakeholders that the government would act on finalising outstanding mining legislation and deal with uncertainty in the mining industry.
Delivering a keynote address at the opening of the “Investing in African Mining Indaba” in Cape Town, Zwane said the South African government had been hard at work to improve regulatory efficiency through the integration of the applications for mining and related rights, water use and environmental permits. He said that the recovery of commodity prices signalling market rebound needed to be entrenched and supported by stakeholders working in concert to ensure the sustainability and resilience of the industry.
In periods of low commodities prices, high volume-low value mineral operations (such as manganese, iron ore, coal, etc.) tend to suffer due to high logistics costs, which results in the mining operation being non-profitable and in some cases leading to closure.
New mining operations in Botswana, Waterberg South Africa, Mozambique and Congo Brazzaville have been put on the back burner as it were due to either lack of road/rail infrastructure or logistics costs that are prohibitive at these low prices.
This raises a question of mechanisation, which in developing economies is met with resistance from labour unions as unemployment is usually at unbearable levels. In time this will result
All that said, the mining industry remains the most contributor to development in emerging economies in general. In many instances contributing as much as 10% or greater to the Gross Domestic Product. As result this industry cannot be ignored and new approaches and methods will continue to be sought by all stakeholders.