Mining Indaba 2018 – the key takeaways

A boost in commodity prices, an improved political outlook for South Africa and Zimbabwe and a greater appetite for investment in the mining sector were the key takeaways from the 2018 African Mining Indaba in Cape Town. Here we discuss the opportunities and challenges facing the sector and what the future holds. 

A sustainable future
The rapidly evolving sustainability space was high on the agenda, with Michael Simms, Head of Energy, Mining & Renewables, commenting that there has been a big push into environmentally sustainable mining. ‘’This continues to be under the microscope and may make all the difference in managing, operating and developing a leading mine.’’

Political changes
The winds of change slowly blowing across part of southern Africa also held promise. “Political changes in South Africa and Zimbabwe in particular are very encouraging. I certainly feel there is a lot of potential in Zimbabwe once things open up and investors are assured of geo-political issues, the robustness of regulations and protection for investors,” Michael continued.

Jeff Blackbeard, Strategy Advisor at Moore Stephens South Africa, added: “There is definitely a more positive mood, with keen interest from our clients and partners, saying ‘Zimbabwe is open for business.’’’

The future of base metals and commodities
The swift changes in this area continued to be at the forefront of discussion. “There was a further increase in interest in base metals and commodities which form part of the ongoing battery technology debate, incorporating lithium and graphite, as well as a general buzz and expectation that the electric car will dominate in the future,” said Michael.

Additionally, David Tomasi, Mining Partner at Moore Stephens Perth, said he was encouraged to see the particular interest in Africa shown by Australian mining companies in the graphite space.

Calls for clarity
Despite a brighter mood at the four-day event, there are still some serious challenges confronting the sector. Regulatory certainty was a theme running through many sessions, with calls far and wide for African countries to be more transparent and clear with their policies and for clarity over South Africa’s Mining Charter.   

“From a South African perspective, clarity around the Mining Charter is the single biggest factor influencing capital investment into the mining industry. I suspect that President Ramaphosa will give this a significant amount of attention,” said Olivier Barbeau, Head of Mining at Moore Stephens South Africa. “By all accounts the uncertainty has substantially restricted capital inflows into South Africa and we have fallen behind others on the continent,” he added.

Other challenges including the volatility of currencies, appropriate use of technologies and an international focus on tax and transfer pricing are also likely to challenge the industry in the year ahead, commented Jeff.

A positive outlook
Despite the obstacles, the team was positive about the overall prospects for mining in Africa, as well as how it can help clients achieve their goals in the current market. “Our consistent and common approach allows us to assist our global and African clients in successfully meeting and exceeding their objectives for growth and expansion,” said Michael.

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