South Africa, and the mining industry, in a bullish mood at Cape Town conference
Last week, Mining Journal and Mining Magazine attended the Investing in Africa Mining Indaba in Cape Town. With gold and copper prices soaring, it was no surprise that the mood in Cape Town was more bullish, and the conference busier, than it has been in years.
Adding to the upbeat mood was the evident improvement in morale in the conference's host nation. South Africans were uncharacteristically optimistic. The general consensus is that the coalition government is making progress on some of the country's more intractable problems, most notably improving the electricity grid. Improvements to Eskom, the state-owned power company, and the rise in rooftop solar seem to have brought an end to load shedding, and South African miners have been able to operate without backup generators over the past year.For Transnet, the country's rail and port operator, there is still a long way to go, but green shoots of improvement are reported there as well."Sometimes, flat is as good as up," one attendee quipped.Anglo still backing SAAnglo American, once the jewel in the country's mining crown, had a strong presence at the conference, despite the fact that its ongoing divestment plan and planned merger with Canadian Teck will leave its presence in South Africa smaller than it has been at any point in its 109-year history.Anglo chief executive Duncan Wanblad signalled that he was not abandoning the country, as he announced a major investment in a national exploration fund.The unveiling of a virtual core library by the Council for Geosciences was very welcome - a tangible improvement in the country's stock of pre-competitive data and a boon for a long-dormant domestic exploration sector. Barrick, on the other hand, kept a much lower profile despite being a main sponsor. The company is going through some upheaval after the departure of chief executive Mark Bristow last year, as it readies the carve-out of its North American mining business.Last week, the miner put its flagship copper project, Reko Diq, under review. But there was good news shortly after the conference from Mali, where the company got a permit renewal for its Loulo mine.A reminder of the worsening security in West Africa was the Burkina Faso stand, populated by delegates from the military government in fatigues.Risky worldThe tense geopolitical backdrop to the conference was evident in many panels as well. But for African mining ministers, the prospect of fragmenting supply lines offered opportunities as well as risks.One topic of debate was the sweeping minerals deal signed between the US and the DRC, which the country's mining minister defended on stage.Overall, the trend among investors showed growing interest in Southern and Central Africa, particularly Zambia, while West Africa is becoming increasingly out of fashion.Simandou in the spotlightOne exception to the West African cloud: Guinean delegates were impossible to miss in long white robes emblazoned with ‘Simandou 2040'. They were a fashionable reminder that the titanic iron project began operations last year, against the odds and in the midst of an unfashionable moment for the metal.Rio Tinto SimFer's managing director, Chris Aitchison, addressed the conference about the complex dynamics involved in bringing the joint venture to life. Consistency, he said, was the defining quality of the Guinean government.The big mines opened last year, Simandou and Ivanhoe Mines' Platreef, were projects that required collaboration between China, Western companies, and Africa. In these mines, US-China tensions seemed much less pointed in Cape Town than, say, in London.In fact, some projects branded with an ideological or geopolitical selling point might face unnecessary struggles. We heard whispers of a critical minerals project increasingly trapped in development because the money behind it refused to consider a Chinese offtake, given that no Western equivalent existed at scale.DRC growthThe DRC remains the continent's biggest potential growth vector, evidenced by a huge stand in the main conference hall. Key to unlocking this region of South-Central Africa are a couple of huge infrastructure investments, the Lobito Corridor, and a possible revival of the Chinese-funded Tanzara railway.The ambition from within Africa to connect its coasts was evident in Kenya's mining minister, Hassan Ali Joho. Never mind Cape to Cairo; it's Lamu to Douala that will matter.Joho's pitch to global investors centred on the historical absence of mining and unexploited mineral richness in the East African powerhouse. But in the Old World, old mines were attracting real interest. Nowhere on the continent has as many forgotten mines as in the Southern African Development Community . We heard Hexagon Mining's president, Dave Goddard, explain how advances in technology had changed the equation, a sentiment echoed by BME managing director Ralf Hennecke.Gold shinesThe trend in commodities was easy to predict. Copper and gold, which are enjoying record prices, were very much in vogue.Uranium, too, we heard, was drawing unusual interest, particularly Namibian deposits.Another winner was platinum, currently in a bull market. For Valterra, formally Amplats, spun out of Anglo American last year, it couldn't have come at a better time. A dinner held by the company, attended by Mining Journal, was a notably lavish and ebullient affair.Ivanhoe also got some limelight from its massive Platreef project, which is both a major new precious metals project at a time when prices are soaring and a vote of confidence in South African mining.Some of the stars of previous years, meanwhile, were relegated to the C-list. Battery metals like lithium and cobalt were little discussed.What future for diamonds?The D-list began with diamonds. Industry advocates seemed desperate for someone big to say a good word about the mined version of the mineral.The addition of Namibia to the ‘natural' diamond marketing funding scheme, the Luanda Accord was not it.Mined diamonds will return, but it will be difficult to win the moral argument , even while countries like Botswana struggle under collapsing export revenues.In fact, it was telling that Botswana-based miners had turned their attention to gold and other minerals. Juniors were selling their familiarity with the desert nation's geology and famously conducive government institutions - and making a strong case.
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