Reflections from Mining Indaba 2019 – Part 1

Team Diggers

Mining Indaba didn’t start with a bang so much as a bowl. For the past six years, Buchanan has organised (with Centamin and Numis generously sponsoring) a “Diggers vs Dealers” cricket match, which, after all these years, is now considered the de facto (though not official) opening to Mining Indaba. More importantly, the Diggers team beat the Dealers this year with the highest run score to date (176) and widest margin of victory (39 runs).

The Diggers team included players from Tharisa, Apollo Minerals, Titan Drilling and Danakali. On the dealers’ side there were players from BAML, Hannam and Partners, JP Morgan and Financial Times. The kit has been offered to the Under 15s township team of Khayelitsha Cricket Club, Graceland (Cape Town). Message us if you would like to play next year.

Our non-mining colleagues think our annual trip to South Africa is all fun and games. Indeed, it is enjoyable (and a welcome break from London’s winter) but a lot of work goes into it too. Let me explain…

Ahead of Mining Indaba, Buchanan organised and supported five site visits (Petra Diamonds’ Finsch and Cullinan mines, Pan African Resources’ Elikhulu Tailings Retreatment Facility (ETRF), Tharisa’s mine in the Bushveld complex and Kenmare’s Moma Mine in Mozambique). Attendees included a range of investors, analysts, media and corporate Senior Management and Directors.

Tour highlights include visiting the sorting room at Petra’s Finsch mine to see how the diamonds are sorted. Very few of the attendees had ever been this close before to so many beautiful stones and the opportunity to touch them was an incredible experience for them.

Pan African Resources gold pour

The Pan African Resources’ site visit to ERTF kicked off with a gold pour (you can watch it here.) It was mesmerising to see the molten gold spills into the moulds.

Pan African Resources’ gold bar from the vault

Once the pour was completed, the Mine Manager went into the vault and brought out a gold bar. As you can imagine, this made for a very Instagram-able moment. Afterwards, Mine Management gave us a tour of the plant and tailings. Normally, tailings are what is left over after mining has happened. But in the case of ERTF, the tailings is what is mined via an incredibly simple and economic process that Pan African Resources has perfected. By using hydraulic pressure (e.g. water), the tailings from an old mine are blasted and the residual gold that was in the tailings is separated.

This is possible because the mining processes 50 years ago had a lower recovery rate than mining today. Hence, this 1970s-era tailings has a grade of 0.3 grams per tonne. With a recovery rate of 50%, Pan African recoups 0.15 grams per tonne.

Once we landed in gorgeous Cape Town we got down to work supporting a couple of events for Africa Finance Corporation (AFC), a multilateral finance institution.

Attendees at the AFC roundtable discussion on de-risking mining projects in Africa

Of note was the roundtable presentation on the topic of de-risking mining projects in Africa. There is a lot of opportunity in Africa seeing as it is a continent rich in mineral wealth but there are many challenges that prevent making the most of it. These include lack of infrastructure and data as well as unstable and/ or insufficient environmental, sustainability and governance (ESG) frameworks.

AFC drinks reception

AFC offered examples of how it has overcome these challenges and de-risked projects, helping unlock countries’ economic potential through inclusive growth.

Bernie Pryor, Chief Executive at Alufer Mining, spoke at length on how his company was able to build and operate a mine in one of the most challenging countries (Guinea is ranked 152 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings).

By all measures this was a very successful Indaba with (almost) everything going as planned. We look forward to Mining Indaba 2020 and making our clients’ experience even better than this year.

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