As the world shifts away from some of the commodities that have long been mining’s bread and butter – most notably coal – towards a greater focus on the resources required for clean energy generation, investment into exploration and mining will become crucial.According to Minerals Council president Mxolisi Mgojo, exploration is critical to grow the local mining industry.Demand for commodities such as copper, nickel, manganese, vanadium and the platinum group metals is set to increase.Mgojo says to drive more exploration on local shores government needs to deliver a certain, predictable and competitive policy and regulatory environment because without this investment into exploration and mining will not happen.“Between 2000 and 2018 Canada attracted, on average, $2 billion in exploration dollars per annum, Australia attracted $1.8 billion, while South Africa attracted only $194 million during the same period. In 2019, South Africa accounted for only 1% of global exploration expenditure and only 0.1% of greenfields exploration,” he said during a recent conference. “Why is this? Lack of transparency in the permit system, delays in the issuing of permits, regulatory uncertainty, and lack of properly structured tax incentives for individuals/entities to invest into exploration in the country. These are only a few of the low-hanging fruits that could change our economic trajectory within the short term.”Exploration in South Africa would remain in the doldrums, and unless there was a concerted effort to attract more investment into exploration, mining would suffer going forward.Minerals Council CEO Roger Baxter said the country could ill afford such a development. “Despite the challenges faced during 2020, the mining industry contributed R361.9 billion to GDP, employed 451 427 people, paid employees R148.5 billion, and contributed R26.2 billion to PAYE on behalf of employees. It paid R34.7 billion in value-added taxes and R11.8 billion in royalties, while selling R608 billion in primary mineral sales. The sector exported R575.1 billion in sales during the year.”According to research by S&P Intelligence, not only is South African exploration expenditure dropping, but the country’s percentage share of African exploration spend is also continuing to decline. The country is currently at its lowest level since 2002.S&P Intelligence data showed that South Africa’s share of global budgeted exploration spend has dropped by 20% from R1.4 billion in 2019 to only around R1.1 billion and the country is now ranked sixth in Africa behind the DRC, Côte d’Ivoire, Burkina Faso, Mali and Ghana.Mgojo maintains that the only way to turn the situation around is for government to deliver an open, transparent and online mining cadastre.
