The junior mining and exploration sectors in South Africa provide a way forward to expand the country’s critical minerals discovery and producing capability, with various funding programmes to assist qualifying enterprises and junior miners in conducting prospective work, says South African mining industry employers organisation Minerals Council South Africa.

Such programmes include the R400-million Junior Mining Exploration Fund (JMEF), established by development finance institution the Industrial Development Corporation (IDC).

Whilst the IDC fund focuses on early-stage greenfield exploration, a separate fund of R1.3-billion has been initiated by the Public Investment Corporation (PIC), which will support early-stage exploration; however, this requires the provision of some proven geological results.

Funding from the IDC’s JMEF could then be increased from R400-million by the PIC, as one possible source of funding, as only one of the current eight selected projects by the IDC have proven some results, says Minerals Council South Africa junior and emerging miners’ desk head Grant Mitchell.

These opportunities are likely to receive special attention and investment interest at this year’s Junior Indaba, hosted by mineral resources conference organiser Resources for Africa, from June 9 to 10, at the Johannesburg Country Club, in Auckland Park.

This year’s event will provide a platform for junior miners to debate the value of their emerging mining projects and, in doing so, potentially attract new investment into certain projects to propel new mines forward.

Further, Minerals Council South Africa is developing a Growth and Development Strategy with its junior mining and exploration members. Ongoing discussions are being held to develop the junior mining and exploration sector in South Africa and address the ongoing challenges that junior miners and explorers face. These obstacles include illegal mining and inflated development costs.

“We are looking at all aspects . . . the environment is very tough for juniors, with the regulatory environment being one of the biggest challenges . . .” says Mitchell.

Despite having the knowledge, skills, infrastructure and organisations that make the junior mining and exploration sector a highly investable industry, junior miners have fewer resources than their more established counterparts to deal with obstacles. These factors require critical attention, he adds.

South Africa has the junior and senior mining potential to accommodate the growing global demand for critical minerals such as platinum-group metals, copper, iron-ore, chrome, manganese, rare earth elements, vanadium and titanium. These minerals are important for advanced manufacturing, and the manufacturing of mobile devices, electric vehicles and data centres, as well as infrastructure, including that of renewable energy.

In terms of investment and mining, Mitchell says it is “extremely critical” for all stakeholders to invest more in junior exploration and mining, as South Africa is “running out of time” to find new mines, with its current stock increasingly reaching maturity. Generally, it takes about 20 years to progress from a deposit discovery to a developed mine, he notes.

“It’s critical. We’ve got to get that investment . . . and we don’t have big enough capital markets in South Africa. We have to go offshore,” he elaborates.

Junior Indaba Foci

Challenges and opportunities of the junior mining sector will take centre stage at this year’s Junior Indaba, which will likely focus on the new draft Mineral Resources Development (MRD) Bill.

“[The MRD Bill] should be out by next month, and I think that will be a very big theme or topic, and they will certainly have the [Department of Mineral and Petroleum Resources] Minister Gwede Mantashe there or the DG Jacob Mbele to talk about what that Bill is,” says Mitchell.

He expects robust debate from various stakeholders, including unions, mines and community groups regarding the MRD Bill.

In terms of exploration and MRD Bill implications, Mitchell says there is a measure of relief, as the MRD Bill is not likely to place an empowerment requirement on junior mining or exploration companies, as junior exploration is “high-risk” and empowerment requirements could hinder investment and tighten barriers to entry.

Going forward, he says the Junior Indaba ties in with the great potential that South Africa’s junior mining sector holds.