As the mining sector in South Africa continues to struggle with falling commodity prices, geology expert and head of Minera Ricardo Resources, Dr John Bristow, has suggested that the solution lies in the junior mining and exploration industry.
According to Bristow, a replenished enthusiasm for exploration, combined with some tweaks to the regulatory framework, could solve many of the sector’s problems.
“The mining sector has always been a pillar of sorts for the South African economy. Although it has now diversified considerably, the country has been heavily dependent on mining revenues from gold, platinum and coal in the past, and continues to rely on them for approximately 10% of its GDP. As a result, the country has become a hub of the mining industry for firms across the world,” said Bristow.
He added, “Heavy reliance on these non-renewable reserves has resulted in severe depletion of most of the country’s orebodies. To make matters worse, a dip in the price of precious metals such as platinum and gold has caused a dent in the revenues of the sector amid a broader economic slowdown in the country.”
While economic dynamics will determine the outcome of the latter, Bristow, suggested the industry return to exploration and junior development to spark entrepreneurship in the sector, which will in turn combat the problem of depleting reserves.
He admitted the unlikeliness of finding any monumental new reserves, but emphasised the importance of optimising small and mid-tier deposits, even if only six to ten of these were found.
“About 50 to 60 mineral deposits are discovered around the world annually, 50-60% of which are discovered by junior companies. Moreover, such companies contribute significantly to their country’s economies across the world.
Bristow noted that regulatory reforms formed a critical role to bridge the current gap. He said he advocates for a simple and pragmatic mining policy, managed with emphasis on quick and accessible information, as well as a five-year transformational plan for the sector. Without such a policy, Bristow predicted the demise of the mining industry within the next five years.