SIGNIFICANT GROWTH FOR AFRICAN MINING IN 2023

By Benjamin van der Veen

Africa’s mining sector is primed for growth in 2023, according to Johann de Bruin, founder and CEO of Erudite, an engineering, procurement, and construction management company with operations across Africa.

“The mining industry has seen its fair share of incredible highs and lows over the past decade, 2022 being no exception,” says De Bruin.

“South Africa faced prolonged strikes early in 2022, as well as continued energy woes, higher-than-usual rainfall, global supply chain disruptions, and a volatile commodities market. The interest in commodities such as graphite, lithium, nickel, and cobalt, to name just a few, has re-energised the mining sector across the continent.”

He believes that exciting times lie ahead, and o ers four predictions for the mining sector in 2023:

Exchange Rate Slump

The rand was 8.47% weaker year on year against the US dollar in December 2022. De Bruin notes that the ZAR/USD exchange rate will probably stabilise around current values over the next two years.

“While a weaker rand is less than ideal for the average consumer, it is beneficial for exporters. Local goods and commodities become less expensive for our international trading partners to acquire, in comparison to competing markets, while the rand value for exporters is higher, which means that producers receive more for the same goods,” he says.

Supply Chain Recovery

As the world enters the final recovery stage from the post-pandemic slump, and countries adjust to and find workarounds for disruptions caused by Russia’s war on Ukraine, as well as the lingering tail of COVID-19 in the East, De Bruin says most of the supply chain issues plaguing the industry will essentially continue through 2023.

A Surge In New Projects

As other issues are resolved globally, he believes there will be a pronounced increase in industry investment for the exploration of new mineral deposits, the founding of new mining operations, and the expansion of existing mines in the battery commodity market.

International Opportunities

As De Bruin notes, extractive industries are driving the global post-COVID economic resurgence, regularly revealing new opportunities in the market. Additionally, as the war in Ukraine seems set to further fuel global shortages of many commodities in 2023, South Africa and the rest of the continent are poised to help resolve growing global demand issues.

Surge In New Projects In The Drc

The mining sector is a strategic market vital for the Democratic Republic of the Congo (DRC). The country has mineral resources that are unmatched in the world: it is Africa’s largest producer of copper and the world’s biggest producer of cobalt. The economic impact of mining accounts for more than 25% of GDP.

Over the years, numerous multinational companies have established themselves in the DRC and contributed to developing genuine value chains.

Extractive industry value chains are connecting mining with other sectors. The availability of local financing also shapes their development. In the face of exponential growth in demand for the minerals needed for batteries, financing needs are increasing for exploration and operating companies.

The favourable climate for mined commodities – and battery minerals in particular – is giving the DRC great opportunities to leverage its resource wealth; however, there are several burning issues that mining companies there are facing.

These include social and environmental impacts, mine closures, mineral resource and reserve estimates and skills development, says Wouter Jordaan, partner and principal environmental scientist at SRK Consulting.

“The DRC has long been an exciting mining destination, and our SRK Consulting Congo practice has seen considerable progress over the 10 years since its establishment,” he says. “Among the issues we are working on with clients is the relationship between mining companies and communities.”

Jordaan says increased exploration work in the country, both for new projects and to expand existing operations, has also heightened the need for independent and accurate mineral resource and reserve estimations. Depending on where the project owner is located or listed, various codes are used in the DRC.

COMMUNITIES, SKILLS AND BENEFICIATION

DRC President Félix Tshisekedi spoke about the mining potential of the DRC in his speech at Mining Indaba 2023.

“It is sad to note that this abundant natural endowment (the mineral wealth of the DRC) has still not benefited the country, let alone Africa, because of issues of poor governance rooted for decades, but also insecurity cleverly orchestrated by dark powers greedy for our natural resources, as is currently the case in the eastern part of the DRC,” he said.

He told delegates of his idea for local industries to process mining products, to enable African populations to benefit more from the riches of their subsoil, through e ective beneficiation.

“The mining sector in the DRC can only be profitable for you, the investors, if it responds to the aspirations of the local communities a ected by the mining projects. It is in this … context that revenue redistribution mechanisms have been inserted into my country’s legislation, for the benefit of the populations impacted by mining projects.”

Tshisekedi said his government o ered investors a clean business climate, and ongoing and accessible development of special economic zones. He appealed to the global community for support for stability in Africa, and the DRC in particular, saying measures had been taken to end insecurity and help the Congolese benefit from their country’s mineral resources through rational exploitation.

FOUR PREDICTIONS FOR MINING IN 2023:

■ A weaker rand that is good for exporters

■ Recovery in supply chains

■ Growth in new projects

■ New international opportunities

Andrew van Zyl, SRK Consulting’s managing director, emphasises the speed at which mining has adapted to new challenges and expectations in recent decades. As the sector better understands its impacts, it is continuously improving how it runs operations – including developing local skills.

“Local regulations around Africa are now making the localisation of skills and supply chains more of a priority, like all the practices in our global network. SRK Consulting Congo is locally sta ed and owned, and builds its skill levels and disciplines on an ongoing basis,” he says.