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South Africa – a leading producer of platinum, palladium, chrome and gold – was the worst-hit African nation, with overall mining exploration budgets at a 17-year low. The Democratic Republic of Congo, Burkina Faso and Ghana also had sharp falls.
“I’ve seen 20 or 30 projects that have probably collectively cut R200 million to R300 million (about US$13 million to US$20 million) worth of exploration spending this year,” said Errol Smart, CEO of Orion Minerals.
Investors have been unable to visit projects during the pandemic while restrictions on borders have delayed equipment deliveries.
“Nobody invests in something unless they can go there and see it, touch it, kick the tyres. They want to visit the site,” said Smart.
Orion, which last month said it had discovered further significant copper, zinc and nickel deposits around its flagship Prieska Project in South Africa’s Northern Cape province, has been waiting for equipment from Australia to conduct geophysical surveys.
“We still have uncertainty over when they can get to site to be used,” said Smart.
With less exploration activity, African mineral resources might not be developed fast enough to replace older mines as they become depleted.
There is hope, however, that Covid-19 vaccination programmes will speed the world’s recovery from the pandemic and boost the mining sector. Post-pandemic economic recovery could drive higher metals demand and prices, potentially encouraging increased exploration spending this year, particularly in gold.
Exploration budget increases in Ivory Coast, Guinea and Senegal have indicated continued interest in gold-rich West African countries despite the pandemic.
Bongani Ndlovu