Junior miners are to some extent on life support – this is the analogy that was used to describe the challenges facing them, especially when it comes to funding.
Funding has been muted and worsened by a slump in commodity prices and a slowdown in China.
Abubekir Salim, Managing Director of Vunani Resources, said the company had evaluated over 20 projects in the recent history and had invested in only two.
Salim made the comments at the Junior Indaba taking place in Johannesburg. The indaba is looking at strategic thinking and interactive conversations about the junior mining sector in Africa, with the intention of aiding the advancement and development of this sector.
The Junior Indaba is designed to give explorers and junior miners the opportunity to share views, experiences and uncover opportunities for driving their operations forward.
The company with investment in the coal sector said, “We do not see a coal cliff but a delayed coal cliff,” which might be one of the challenges investors could be warry of.
“Because of the energy demand we are not currently experiencing a coal cliff but in the next two years this seems to be the situation.”
Kevin Hodges, Mining Industry Champion, Industrial Development Corporation of South Africa said the organisation, though actively invested in the mining sector does not do grassroots exploration.
Mining in South Africa accounts for about ten per cent of the country’s GDP and about 15 per cent of its employment.
Tony Harwood, President and CEO of Montero Mining and Exploration said everybody was trying to make money and mining exploration was a gamble.
“Over the years money has been lost in mining exploration by both major players and juniors,” said Harwood. He said in this depressed environment there was still room to mobilise capital.
“You have to have good projects with great returns and prospective investors should [see a clear path on how money will be generated],” he added.