By: Creamer media

Speaking to those attending the webinar of the Junior and Emerging Miners Desk, which discussed the state of South Africa's junior mining sector, Mthenjane drew strong attention to current global energy metal needs and the ability of South Africa and Africa to help meet the needs of the global energy transition.

“We’re at a critical time, and there's two perspectives I want to share as an illustration of the criticality of this time in which we find ourselves.

“The first one is the global energy transition and the demand for what we are calling energy metals, and the second point, from a global perspective, is the geopolitics. At times, it feels like there are too many kids in the playground with insufficient toys, if you look at the scramble for natural resources, both mineral and energy resources. This is setting as a very significant backdrop for the South African mining industry in general and exploration in particular,” Mthenjane pointed out.

“The second perspective is the significant need for infrastructure development, economic growth, investment and social prosperity and I think herein is the significance and importance of exploration, which is going to be critical to the confidence in the supply chains for both current and long-term mineral needs.

“To be able to achieve this, I think there are two essential components that we will need to be very aware of and the first of these is coordinated policy environment. I'm referring to within the Minerals and Petroleum Resources Department and also across government departments.

“The second critical element for me is that we’ll need to re-educate and reinstall confidence in exploration, particularly when it comes to greenfield development.

“We're all aware that the current mines in South Africa were founded more than 30 to 50 years ago, in as far as mines being developed from greenfield operations.

“My hypothesis is that currently we don't have an exploration DNA as a country, which is where the research outlined during the webinar comes in and which is important to inform us of the latest developments.

“I believe that we’ll need to create what I call an ecosystem for the exploration boom that will be required to meet future mineral demands.

“Looking ahead, we’ll need a systemic change that will not only happen merely from regulatory changes or a sequence of events, but rather a multiplicity of changes which will need to happen simultaneously,” Mthenjane told the webinar covered by Mining Weekly.

Minerals Council acting chief economist Bongani Motsa pointed out that in 1994, mining was South Africa’s second-fastest growing sector after utilities, involving mainly electricity and water, but by 2025, it had shrunk to being 11% smaller than what it was in 1994.

Mining was the only sector that contracted in real terms over the 1994 to 2025 period and in the period from 2010 to 2025, in real terms, mining shrunk by 7%.

“It’s true that commodity markets are volatile, but the sector should respond to price increases,” said Motsa, while displaying a slide showing South Africa’s mining failing to respond to higher prices.

“This is not normal unless there are serious bottlenecks holding the mining sector from achieving its potential. Why this is so we’ll deal with later. For now, let's talk about what I consider the most important aspects of the mining value chain, which is essentially exploration.

“Like they say, without exploration, there won't be new mines. Sounds cliche, but this is ever true in South Africa,” Motsa told the Junior and Emerging Miners Desk webinar, which discussed challenges faced by junior miners in South Africa, including high legal costs, disorganised regional offices, and delays in the mining cadastre system.

Emphasised was the need for diverse financing mechanisms such as equity, debt, streaming, royalties, and convertibles. Better regulatory support and financing strategies to unlock South Africa's mineral potential were called for.