Editor's Note

2018 in focus: More promise than production

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Welcome to another edition of Mining Prospectus as we bid farewell to 2018, a year that promised much for South Africa’s mining sector after President Cyril Ramaphosa took over, but failed to deliver meaningful growth.

The uncertainty over the implementation of Mining Charter 3 has had an effect on business and together with ongoing land disputes the local mining industry has been unable to reach anything close to its potential.

With the 2019 elections in our crosshairs there is unlikely to be large amounts of investment in financially burdensome projects, which typically have a long lead times. It’s a wait and see period for business and one hopes that another peaceful and relatively uneventful set of elections will help build confidence.

Unfortunately mining projects require long term planning and with at least 35 years life of mine expectancy it becomes tricky planning when land rights and potential licenses to mine and water may be stifled in red tape.

Meanwhile, much has been made of the evolution of the electric car, its greener environmental footprint and its impact on fossil fuel industries. But when you look closer, there is very little green in terms of how electric cars are manufactured, transported or disposed of. The batteries from electric cars are large and difficult to recycle, a problem that future generations will be left to solve, as numbers spiral in more ‘developed’ countries.

In a South African context unless you have your own solar panel at home, chances are, you’re using coal power to charge your electric car up at night through the national grid. You might as well save the extra money you pay to go electric and buy a modern small-engine car that consumes frugal amounts of fuel.

Together with a poor range and limited infrastructure locally, the pickup of electric cars is still relatively slow in the southern hemisphere. Countries like South Africa and Australia, with large open spaces and relatively low levels of heavy industry, don’t have the same pollution issues as pint-sized Europe. They also have more renewable energy on tap to power the vehicles; we are stuck with over 90% coal power.

However, regulations that work in Europe and progressive California, for example, might not work in South Africa, and we are likely to be at least 20 years behind them in the mass rollout of non-fossil fuel cars and autonomous driving.

There is an upside for South Africa, which has platinum production that can be used for batteries and other technologies that should grow in demand as we all embrace industry 4.0. But with some of the bigger mines being moth-balled, are we able to keep up with demand when the spike happens again?

So as we look forward to what is sure to be an eventful 2019, I wish you a merry christmas and happy new year.

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