The government is planning to expand exploration and attract investment, despite the mining industry’s low investment interest and ongoing disputes with communities standing against mining on their lands. The Department of Mineral Resources and Energy (DMRE) this week released a 12-page document outlining its mining exploration strategy and ambitious plans to attract investment to the sector. Noting ongoing obstacles such as power problems, ineffective implementation of policies, unrest and community protests, the department says tapping into the exploration of minerals such as chromium could usher in a new era “that responds to current and future market demands.” ….
The government is planning to expand exploration and attract investment, despite the mining industry’s low investment interest and ongoing disputes with communities standing against mining on their lands.
The Department of Mineral Resources and Energy (DMRE) this week released a 12-page document outlining its mining exploration strategy and ambitious plans to attract investment to the sector.
Noting ongoing obstacles such as power problems, ineffective implementation of policies, unrest and community protests, the department says tapping into the exploration of minerals such as chromium could usher in a new era “that responds to current and future market demands.” .
“South Africa should take advantage of the opportunities offered by the growing demand for minerals needed by the Internet age with a high reliance on battery storage, artificial intelligence, robotics, electric vehicles and clean energy, with growing market demand globally.
“The country contains known deposits of minerals that contribute to these markets, such as copper, nickel, lithium, rare earth metals, graphite and cobalt, among others, but these remain largely under-explored,” the paper says.
To achieve this, plans are in the pipeline to increase research such as geoscience mapping by the Council for Geosciences from 9% to 14% over the next five years, to improve access to geoscience data.
Attention will be given to new and small exploration companies that will receive technical and financial support up to the feasibility stage.
The DMRE says it expects to attract at least 5% of the world’s exploration spending over the next three years, despite the country’s mining industry ranked 10th worst for investment attractiveness from the Fraser Institute’s annual survey of mining companies.
South Africa ranked 75th for 2021, down from 60th in 2020.
“Political uncertainty affects investments”
Mining and labor analyst Mamokgethi Molopyane says that while there will always be a global interest in investment and exploration, exacerbated by the Covid-19 pandemic that has sparked supply chain concerns, South Africa’s political environment will have always negative implications on investment decisions.
READ ALSO: Investors worried but tentatively positive on SA
In addition, the Russia-Ukraine war has altered investment decisions, but the country could see some injection of funds despite power problems and low GDP, Molopyan said.
“The DMRE is trying to position itself as a company and at the same time demonstrate its seriousness on the exploration policy.
“Three months ago South Africa was and to some extent still is unattractive to many. However, the war made some investors look favorably on South Africa. “
The previous exploration agreement has changed
In response to the document, the organization of industry employers SA Minerals CouncilApparently unimpressed by the new plan, he said the DMRE strategy shows changes to the exploration agreement reached between it, the department and the Council for Geoscience last year.
He said one of the urgent tasks for the DMRE is to accelerate the implementation of a transparent cadastral system – a registry for property ownership – that is efficient and corruption-free.
“With South Africa first ranked in the 10 least desirable of the 84 global mining jurisdictions in the 2021 Fraser Institute survey, the mining sector needs investor-friendly regulations and policies to ensure sustainable and inclusive growth for the benefit of all interested parties, “the Council said in a statement.
In a collaborative effort by the board, it says it has offered the DMRE financial and technical support to urgently implement an internationally approved system to replace the Samrad (South African Mineral Resources Management System) which, in its view, hampers the ‘exploration.
According to DMRE, the mining industry contributed 8.2% to GDP, attracted over Rs 575 billion in export earnings, and earned Rs 608 billion in mineral sales in 2020.
The country earned R27.2 billion in corporate taxes from the industry.