Junior miners and women have the potential to change the face and trajectory of the mining industry in South Africa writes Thabile Makgala.
Junior miners and women have the potential to change the face and trajectory of the mining industry in South Africa writes Thabile Makgala.

Reinvigorate exploration in SA

By Thabile Makgala Time of article published Jun 3, 2019

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JOHANNESBURG - Junior miners and women have the potential to change the face and trajectory of the mining industry in South Africa. I believe this is a change we need and should support.

Let’s look at the mining sector first, because for women to meaningfully participate and contribute to the industry, we need it to be robust, growing and attracting investor interest.

The dominant sentiment towards South African mining over the past decade has been overwhelmingly negative, with phrases like “a sunset industry” bandied about. This was largely informed by South Africa’s larger mining houses facing multiple challenges, including ageing infrastructure, the inherent difficulties of deep-level mining, escalating costs and falling commodity prices. Many mines have closed due to the unsustainable losses they incurred.

The situation was worsened by the fact that meaningful exploration had not taken place for decades, despite South Africa having such rich mineral endowments. Data produced by S&P Global Market Intelligence shows the decline in South Africa’s exploration sector.

South Africa’s share of Africa’s exploration budget fell to just 8.3percent in 2017 from 35.7percent in 2002-2003.

But the cycle has shifted, and we are now seeing increased appetite for our commodities, driven by, among other factors, rapid technological advances driving demand for precious metals and minerals, including palladium, copper, zinc, nickel and cobalt. This means we need to reinvigorate our exploration activities - the ambit of the junior and emerging miner.

“Junior mining” generally refers to prospecting and exploration companies involved in the early stages of mining development, as well as mid-tier producers, while “emerging miners” are typically smaller companies involved in the early mining exploration and developmental stages.

Mining exploration is widely credited with being a catalyst for future economic growth and business opportunities. As such it is important that countries support junior miners to gain access to the capital necessary to fund exploration. This can be difficult for junior, and particularly emerging miners, who might not meet minimum funding thresholds required by banks and private equity funders.

Encouragingly, we have seen several mining funds emerge, which aim to benefit from South Africa tax concessions in financing early-stage businesses.

Equally encouraging is the government’s junior miners’ programme to assist new entrants to access funding. The Department of Mineral Resources (DMR) partnered with the Industrial Development Corporation to establish a junior miners’ fund to provide exploration investment capital to emerging black-owned mining companies.

Turning now to women in mining. There is a strong business case for gender diversity.

A diverse workforce has been shown to create a more inclusive culture. Diverse people bring diversity of thought to organisations, which results in better decision-making, stronger governance and improved economic performance.

A recent report from the Peterson Institute for International Economics found that 30percent of female representation on boards could add up to 6percentage points to net margin.

It is important for mining companies to create policies to ensure, for example, a 50/50 gender mix of new graduate intake and that women are given fair treatment when promotional opportunities arise.

It is also vital that the industry better promotes itself to students before they reach university.

Ongoing digitalisation, automation and AI will impact gender diversity in the future - the changes are shifting the type of work being done. For example, the changes allow for operating equipment remotely, away from mine sites, which may be attractive to people who had not previously considered mining due to the physical strength needed to perform some activities in traditional mining.

Before we reach that future, however, we need proactive diversity policies, a workplace culture that is female-friendly, policies to deal with sexual harassment and gender discrimination in the workplace, and it is vital that men understand the challenges women face and actively support equality.

The pay gap between men and women should be eradicated and we desperately need more women in senior leadership roles to act as examples and mentors to other women, and to influence important company decisions.

The key question is: how does Mining Charter III support both juniors and women? The short answer is, not enough. The DMR consulted junior miners when drafting Charter III and has made special provisions dealing with the junior miners’ space, but some hurdles remain, particularly on the requirement for enterprise development.

I also firmly believe the charter could have been more pro-women. For example, on the procurement requirement, women should have their own targets as opposed to sharing them with the youth. And while employment equity targets are set, adherence from mining houses is sorely lacking.

To conclude: with the right support from the government, investors and the miners themselves, the South African mining sector could again materially boost South Africa’s economic growth as it once did in the past. Juniors and women should play a key role in this transformation of a once-flagging industry.

It’s time for juniors and women to come out from the shadows. Our country needs them.

Thabile Makgala is Executive: Mining at Implats and chairperson of Women in Mining South Africa (WiMSA). She is a guest speaker at the Junior Indaba taking place on June 4-5.


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