Improve mining regulation for Africa to thrive, indaba hears

Junior mining and exploration companies operating in South Africa and the rest of the continent stand to miss out on opportunities in critical minerals if regulations are not bolstered.

This is according to experts at the Junior Indaba hosted by Resources4Africa in Johannesburg on Wednesday.

Africa is endowed with critical minerals including copper and lithium that are necessary for the transition to cleaner energy. However, more needs to be done to improve regulations in Africa, including in South Africa.

Speaking about the role of junior miners in meeting the demand for critical minerals and metals, head of natural resources and environmental practice at ENS Ntsiki Adonisi said Africa needs clear laws, consistency and transparency.

Adonisi said in terms of processing applications, mining jurisdictions need to be clear on how long it will take before applications are processed.

If it is 30 days, let us stick to 30 days. That will also encourage exploration because funders will know what they are in for.

—  Ntsiki Adonisi, head of natural resources and environmental practice at ENS

“If it is 30 days, let us stick to 30 days. That will also encourage exploration because funders will know what they are in for,” she said. Funders should receive tax incentives to boost investments, she added.

“I think it is key in the African continent to attract foreign investment, but also look locally at what sort of beneficiation can happen,” said Adonisi.

Last week, the Fraser Institute's Annual Survey of Mining Companies found that South Africa is now ranked 64th among the 86 mining jurisdictions it assessed.

The survey of mining and exploration companies assesses how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment.

The survey ranked Utah in the US as the top mining jurisdiction for investment, followed by Nevada, also in the US, and the Canadian province of Saskatchewan. While Botswana was ranked the highest jurisdiction in Africa, coming in at 15th place, the survey found four of the 10 least-attractive mining destinations — Niger, Mozambique, Zimbabwe and the Democratic Republic of Congo — are in Africa.

Adonisi said African countries had to work together to improve competitiveness.

She said regional harmonisation and collaboration between African governments were key, otherwise the continent would miss opportunities in the critical minerals space.

The issue of funding was also raised during the conference. 

George Roach, CEO of Premier African Minerals, said: “Unless you are able to find some very exciting fundamental in your project that sets you aside in some way, you are going to find it difficult [to get funding].” 

Premier African is focused on strategic metals and mineral projects in Zimbabwe, Namibia and Ethiopia.

Louis Nel, CEO of Bombela-based Manganese Metal Company, said raising capital is expensive.

“You are competing against China where their capital is relatively cheap. We have got our work cut out for us to raise capital,” Nel said.