The Mining Landscape for the Year Ahead

By Mzila Mthenjane, Executive Head of Stakeholder Affairs at Exxaro.

With the water crisis in Cape Town reaching critical levels, and emerging as a hotly discussed topic, there’s never been a more pertinent time to reflect on sustainability in South Africa, and, of course, the entire continent. Africa already faces major issues, like poverty and food shortages. Unfortunately, these and other problems cannot be dispelled overnight. 

Yet there continues to exist, a massive potential across the continent; which, if tapped into and utilised correctly, will see its landscape moulded into something much more sustainable in the medium to long term. With access to large amounts of natural resources, mining organisations need to play their part in shaping a sustainable future – one that will improve the lives of people in communities across the continent. 

What does the mining landscape for South Africa currently look like? 

As it currently stands, mining in South Africa is in a precarious position. It exists in a changing political landscape, which is creating uncertainty for the industry. The primary goal of 2018, it seems, is for the mining industry and government to work together to provide certainty. Right now, high levels of uncertainty, paired with record lows in sentiment, has resulted in poor levels of investment. Tackling this issue head-on rests largely on the shoulders of the MPRDA’s Mining Charter, which comes up for review in the coming months. 

In recent weeks, the US Dollar has weakened, while this poses several benefits for South African citizens, such as potentially lower fuel costs and cheaper imported goods, it affects mining in the form of lower export revenues. An optimal and fairly-priced currency, amongst others, is what is required for sustainable growth of the industry

The mining industry is a large part of South Africa’s economy, and it plays a role in uplifting several other sectors. All will be affected if exports are severely affected due to the weaker US Dollar and resulting stronger ZAR. 

Ploughing ahead into 2018 

Being relatively young in the mining industry has given Exxaro the advantage of agility – without any legacy issues. There exists an opportunity to do things differently, and the organisation subscribes strongly to this principle. It will certainly be a strong focus moving further into 2018. 

Coal remains a key commodity for the group.  We have looked at the resource from every angle and considered all its possibilities. Our resolution is that it is the fuel the organisation will continue to use to power itself, and the country, for the foreseeable future – in a consciously sustainable manner. 

At the same time, to cultivate a better level of efficiency by improving volumes without increasing costs – the coal mining company, will be pursuing and implementing innovations, while maintaining the highest standard of safety and working conditions for employees. The overall supply chain stands to benefit greatly, this due to the rise of innovations such as the Internet of Things (IoT). 

Embracing leaps in technology will open doors for improved interconnectivity between the various activities in the mining value chain; for example, by allowing a much better flow of information from one activity to another. This will enable more informed and quicker decision-making, enhanced insights and understanding of reserves (in both quality and quantity), and better communication with and service to our stakeholders.   

Communities are a priority for a better tomorrow 

All these innovations are being pursued without forgetting the many communities Exxaro serves.  Unemployment and other social issues are a focus for the organisation, and as such there are several people-focused initiatives in place to tackle these concerns head-on. 

Enterprise and Supplier development, for example, pays attention to the people close to the organisation’s operations to ensure that in 10-15 years’ time, they will no longer remain dependent on coal mining for a livelihood. Instead, they will use mining as a springboard for their own development. Working closely with our suppliers will be critical to achieving this goal. 

Another initiative realises the huge need for Early Childhood Development and the organisation is tying into South Africa’s National Development Plan. We are doing what we can to provide a foundation for the nation’s youth today, so that they are equipped with tools to enact change in the nation tomorrow.  

Despite our best efforts, there is the growing realisation and acceptance that the challenges the country faces cannot be solved by Government or Business alone. As a result, in 2017 we joined a collaborative development platform, with other mining companies, civil society groups and provincial government, to create a model which has the potential for regional socio-economic development impact and application in other parts of South Africa, and even other countries. Collaboration and innovation is certainly a must moving forward. 

Pursuing a diversified portfolio 

Though coal remains our primary business commodity (with an over R10 bn of expansion capital planned over the next 4 to 5 years), that’s not to say that other opportunities aren’t being explored. We are an agile and purpose-driven business; we aim to seek, develop, prioritise, fund and commercialise new business opportunities within a rapid stage-gate governed process, that will impact positively on people’s lives. In anticipation of potential threats to coal mining, we are looking at renewable energy solutions, in addition to our Cennergi investment, to find new ways to generate and supply energy and manage energy consumption.  

From a social investment perspective, as we explore our mineral reserves, we are discovering opportunities to further realise our purpose through, inter alia, our growing onsite water treatment experience and land management for potential food production. In the global and local context of global warming, natural disasters, unnecessary waste and innovative technological developments, we believe that the combination of these prospective opportunities will provide for increasing opportunity for Exxaro to power better lives in Africa and beyond. 

Find out more at the Mining Indaba 

The Mining Indaba is an annual gathering where governments, investors, and mining organisations meet to discuss the development of mining in Africa. It’s an ideal platform for mining organisations to discuss their plans for the year ahead. 

Exxaro will be present at the conference to discuss a number of different topics relating to the organisation, and the mining industry as a whole. One talk worth attending is the keynote interview that Exxaro CEO Mxolisi Mgojo will be a part of. Its subject, “The evolution of industry thinking and approach to responsible mining, and the role of social trust in creating a sustainable future for the sector” is vital, especially given today’s tricky mining landscape. 

Our vision will be further explored at the Mining Indaba, which takes place in Cape Town from 5-8 February. 

About Mzila Mthenjane 

Mzila Mthenjane is a mining engineer with combined experience in mining and investment banking of 20 years. This includes seven years in deep-level gold mining at AngloGold Ashanti and Gold Fields Limited in senior mine management and corporate development roles, respectively; and six years in investment banking at RMB and Deutsche Bank. His knowledge of business sustainability was honed over six years as executive of business sustainability at Royal Bafokeng Holdings and Royal Bafokeng Platinum. He assumed his current role at Exxaro in May 2013.