As the sun sets on Mining Indaba 2023 and we all make our way home (except for the few that are fortunate enough to live and work in the beautiful city of Cape Town), our team (José Ignacio Morán, Brandon Irsigler, Lubinda Linyama, Emma Kimario, Juvenalis Ngowi (FCIArb), Tom Sipemba, Pearl Nyakabwa, Nurhan Aycan, John Mollard, Omolola Coker, Greg McNab) spent some time reflecting on what are our key takeaways and what do they mean for our clients and industry. In most cases, there are no surprises. For example, as our firm has been talking about for years, the energy transition continues to be a big discussion point. Not just from a mining consumption point of view (i.e. where do mines and mineral processors get their power, a discussion that began long before recent events in Eastern Europe), but also in terms of what will be extracted and processed (i.e. what is needed to build batteries and storage facilities) and what approaches contributes to countries’ carbon reduction obligations and goals.
First, we did not see as many companies coming out afresh to say they will accelerate their own decarbonization, switch to renewable power, electrify processing, running electric mobile equipment etc. That was definitely a focus last year.
Second, we were all reacquainted with the concept of “load shedding” on a regular basis (multiple times per day). There is even an app to tell you when you will be without power. If you have your own generator then that may be fine but without it life becomes very difficult. It really is a difficult concept difficult to imagine for those of us that don’t see it. Without regular power it is almost impossible to run many factories and businesses that rely upon electricity and this causes huge issues for an already fragile economy. It also impacts areas such as the movement to electric vehicles as it is impossible really to use one when you may have no way to charge it. Probably the only solution is for enough large consumers of power, in particular, the large mining companies, to generate their own power and go off grid to free up and surplus elsewhere.
Third, the mining sector continues to be an important economic and social driver for countries like South African trying to improve society generally. This translates into wealth and jobs for the people within the country.
Fourth, while the points above speak to increased overall demand for certain minerals, the almost quiet, because it is such an accepted concept now, point remains that it is important where from and how minerals are produced. The people issues in the ESG discussion are now front and centre. Listening to companies like OCIM Metals & Mining say that they care where the metals they receive come from, it is no surprise that these issues matter. The OCIM team (Miranda Werstiuk and Susan Murphy) made that point repeatedly over the week.
Fifth, the concept of direct mine purchasing by a significant consumer from a mine or trading house is not as far-fetched as it might have been a couple of years ago. Producers of things like electric car batteries or electronics want security of supply.
So, reading all of the points above, one might be inclined to think there is nothing new coming out of this as we head into the Prospectors & Developers Association of Canada (PDAC) 2023 event in Toronto this March. But, like the PDAC (which sadly will not be run again in the summer), these are important discussions for our industry which has historically been built on face-to-face commitments, handshakes and hashing things out across a table. I think we were all relieved that we continue to do this.
For more information on this topic, please reach out to the author, Greg McNab.