EMERGING MINERS
CAUGHT BETWEEN A ROCK AND A © ISTOCK – Jedraszak
HARD PLACE
Juniors struggle to make ends meet By Nelendhre Moodley
J
unior miner New Venture Mining Investment Holdings hopes to be listed on the JSE in the next two to three years as a multicommodity exploration, mine development and operations, and metals company, says CEO Godfrey Mocwane. The chrome and granite-focused miner currently operates a small chrome mine outside Zeerust, has a prospecting right for chrome also outside Zeerust, operates a granite quarry and recently received a mining right for another granite mine. Both granite mine projects are located in Brits in North West. “We target projects where we are able
to process the minerals down the value chain so that we do not export jobs but rather generate income in-country to boost South Africa’s GDP.” Given that New Venture Mining Investment Holdings is a well-established entity, having been founded in 2002, Industry Snapshot took the opportunity to chat to Mocwane about the challenges that junior miners face. Way too many challenges Junior and emerging miners play a crucial role in developing a strong pipeline of projects to ensure a healthy state of the mining industry; but the sector continues
Government funding institutions should be equipped to establish fit-for-purpose funding vehicles for juniors.
Granite quarry in Brits NW Province.
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– MOCWANE
SA MINING INDUSTRY SNAPSHOT
JANUARY 2021
www.samining.co.za
to face an uphill battle when it comes to meeting regulatory compliance and avenues to access funding. The challenges, according to Mocwane, are associated with the implementation of the Social and Labour Plan, excessively high costs of applying for prospecting rights, mining permits and mining rights and the inexplicable delays in the issuing of these rights and permits and compliance with the Mining Charter 2018. “In terms of procurement requirements, we find that the targets (legal requirements in terms of the Mining Charter 2018) for procurement spend on mining goods is 70%, while that for services is 80% on total mining services spend. “This 70% and 80% target must be procured from historically disadvantaged persons (HDPs) or companies owned by HDS. This is an extremely steep ask on junior miners, in terms of securing these mining goods and services, monitoring the process and ultimately reporting on it, in terms of the charter. “The requisite for free-carry shares to communities is also a challenge as most of the lower-level junior and emerging miners are entrepreneurs. They themselves are always in need of funding from investors (in the form of equity and a bit of debt). The entrepreneur needs minimum 51% of equity to manage the company fully, while investors need 40% to 70% of the project, as the risk is too high,” he explains. In addition, accessing project funding is extremely difficult given that the majority of commercial banks in SA are highly