A review of the PGM industry,deposit models and exploration practices: Implications for Australia's PGM potential

Australia is prospective for platinum group metal (PGM) mineralisation (in particular primary magmatic reef, primary magmatic by-product, late magmatic and hydrothermal, and alluvial placer type) but its known PGM endowment is negligible compared to that of South Africa, Russia, the USA and Canada. Most Australian PGM projects are operated by mid-cap or junior companies and form part of larger, more diverse project portfolios held by these explorers. Most projects were ‘hot’ while market conditions were favourable. However, as other metals became ‘fashionable’ and market conditions for PGM changed, so did the focus of these companies. Pure PGM companies are rare in Australia. The search for and development of PGM-only deposits in Australia are high risk business activities. No new primary PGM deposits have been discovered since the mid to late 1980s and none of the significant deposits that were discovered or evaluated in the 1980s have been mined. This review suggests that at least several A$10 million but more likely several A$100 million were sunk into PGM exploration and development projects but none advanced to the mining stage. The viability of Australian PGM projects is very sensitive to (1) metal prices, (2) the US$/A$ exchange rate, and (3) large capital expenditure requirements relative to the small size of Australian PGM-only deposits. Most PGM-only projects were initiated at times of high PGM prices. However, advanced exploration, feasibility studies and project development always lagged behind the price booms. South Africa, Russia and Canada contain approximately 98% of the known global PGM reserves. This situation has a very negative effect on the Australian PGM industry as the well-endowed nations continue to receive the lion's share of exploration spend and new projects.     

China's Minerals Future: 1985–2005

China has embarked on major economic and social changes to revitalize the Chinese economy, increase labor productivity, and improve the material standard of living of the Chinese people. This paper assumes that China will achieve its goal of a per capita income of US$800 in 2000, open-door policies will be maintained, and nonfuel mineral commodity consumption will increase as GDP per capita increases. Projections are made of production, trade and consumption of 14 nonfuel minerals for the period 1985–2005. China is projected to increase its net imports to these 14 minerals from about US$5000 million in 1985 to about US$12000 million in constant dollars in 2005. China's investment climate will become more favorable for those multinational companies that bring with them clear comparative advantages in minerals exploration, mining and processing technologies and marketing, and are prepared to develop in-depth Chinese expertise.     

The internationalisation of the Australian mineral industry in the 1990s

Overseas mineral exploration and mining investment by Australian companies increased dramatically from the early 1990s until 1997. In the wake of the Asian economic crisis and lower commodity prices it declined somewhat in 1998 and 1999. Reflecting their international competitiveness, Australian resource companies were actively involved in projects in about eighty nations in 1999. This study assesses the extent of growth in exploration and mining operations, the distribution between large and small companies and the changing regional focus which has been occurring. It also reflects on some of the key influences on this development. These include a strong domestic finance sector, supporting mining services provision, technological competitiveness, a growing attractiveness of offshore locations and increasing structural impediments at home.     

Mining development in sub-Saharan Africa

Mineral production from sub-Saharan Africa is an important contributor to the economy at the country, regional and global levels. As an example, in relation to global production, the region provides 40% of diamonds, 20% of bauxite and 20% of rutile. However, with two or three notable exceptions, the region's share of mineral production has been declining compared to that of other regions. Whereas in some cases ore reserve depletion has been a factor, the most important underlying cause has been the absence of an enabling environment to attract high-risk exploration investment and to support private sector mining development. There has also been insufficient re-investment by the region's state dominated mining enterprises. Overall, growth is unlikely to occur unless an enabling environment is created to secure and maintain the appropriate levels of investment. The World Bank has recently initiated an African Mining Policy Study with the objective of recognizing and then introducing required adjustment processes into the region's mining industry.     

What drives large South African corporations to invest in sub‐Saharan Africa? CEO's perspectives and implications for FDI policies

Foreign direct investment (FDI) flowing into Africa is highly diverse in terms of the origin of the investors, size of the firms, and the sectors of activity. The motivations and factors driving firms' decisions to invest in Africa are equally diverse. A direct survey of senior management in South African firms that are operating in sub-Saharan Africa reveals that the drivers of foreign investment as well as the risks and the strategies to overcome them differ markedly between sectors. A further finding is that there is a limited pool of FDI promotion policies and incentives that governments can institute that are effective in impacting South African corporations' investment decisions. As a consequence, broad-based FDI promotion policies aimed at attracting FDI across all investor groups are likely to have limited impact in attracting FDI from any particular investor group, or in attracting any FDI from multinational companies similar to the South African companies studied here. Such broad based policies probably need to be complemented with policies targeting those specific firms or sectors which countries hope to attract.     

Corporate social responsibility in the mining industry: Perspectives from stakeholder groups in Argentina

Since the liberalisation of its investment regime in the 1990s, Argentina has seen a rise in foreign direct investment into large-scale exploration and exploitation of mineral resources. However, many social groups (local communities, grassroots movement and the church) often strongly oppose new mining projects on the grounds of environmental, ethical and economic concerns. In a situation marked by widespread conflict, mining companies continue operating and develop Corporate Social Responsibility (CSR) initiatives which are often promoted as a means of contributing to the sustainability and development of the nation. The paper develops a framework to highlight how the principles of stakeholder theory could be used as conceptual and practical guidance for conflict-resolution oriented CSR policies. The framework is further used to analyse two case studies of conflictive mining projects in Argentina. The paper explores how key stakeholders perceive contribution of CSR to welfare and the socio-economic development of mining communities and sustainable development of the nation. It demonstrates that institutional and social stakeholder networks often strongly oppose the idea of voluntary self-regulation implied by CSR in situations characterised by weak governance. Even though the CSR of companies could be improved in areas of corporate communication, transparency, stakeholder engagement and dialogue, it is not seen as a panacea for the social conflicts in the sector.     

Multiple scales of diamond mining in Akwatia,Ghana: addressing environmental and human development impact

Ghana is the second largest producer of gold in sub-Saharan Africa, and has experienced a significant increase in national mining production over the last two decades. Between 1983 and 1998, the mining industry brought approximately US $4 billion in foreign direct investment to Ghana. While large-scale gold mining has seen a significant increase, artisanal gold and diamond mining product have grown exponentially. While much research has been conducted on gold mining in Ghana, there is relatively little research on the environmental and human development consequences of diamond mining in the country. Unlike other West African countries such as Sierra Leonne and Liberia, small-scale diamond mining in Ghana has not been linked to conflict but its role in development has also been relatively modest. This paper examines large and small-scale mining in Ghana's largest diamond mining town, Akwatia, and their relative impact on environmental degradation, health, and the livelihood of artisanal miners. We conclude that while an increase in artisanal diamond mining has been a means of employement and income-generation for small-scale miners, there are some human development challenges, related to environmental burden from land degradation and health. GCD is an ailing mining company in Ghana, in desperate need of an injection of capital to keep the mine alive, but botched bidding has slowed the process of de-regulating the company. We also conclude that the de-regulation of GCD may lead to a relatively reduced environmental burden in Akwatia and more revenue for the GCD to invest in the human development needs of communities in the town.     

Hydrocarbon exploration and production in sub-Saharan Africa

In 1988, sub-Saharan Africa provided only 2.3 million bbllday of oil and 4 thousand million m³ of natural gas, representing respectively, approximately 4% and less than 1% of the world's supplies of those energy sources. This is surprising, given the extensive land area and the presence of sedimentary basins in many of the countries of the region. This paper explores the reasons for this relatively low production, details exploration efforts to date and makes recommendations for increasing investment in petroleum exploration in sub-Saharan Africa.     

Assessing the impact of driverless haul trucks in Australian surface mining

Australia has been a leading mining nation and its mines continue to attract substantial investment due to its strong mineral endowment, mining tradition and high skills base. In recent years Australian mining companies have been facing higher labour costs, which need to be offset by other savings. Automating mine-site machinery offers one potential source of such savings.Underground mines pioneered automated technology largely for safety and mine accessibility reasons and to reduce operating costs. Yet these operations now represent a much smaller portion of the total ore tonnes mined due to the changing mining techniques meaning larger lower grade deposits are becoming economic. It appears the future of mine automation will be directed by surface mining as this maturing technology finds further applications above ground and in the next decade large scale open pit automation trials gain more momentum.This paper assesses the implications of introducing driverless haul trucks in a typical large remote Australian open-pit mine. Such automation will save employee and associated costs, increase operational productive hours and ultimately will reduce mine site workforce numbers. While there will be fewer jobs per mine, with reduced costs and higher productivity some previously uneconomic mines may again be profitable.The social implications of greater mine site automation are the reduction in population of remote mining towns and a decrease in the lower skilled labour requirements for the mining sector. There will be an increase in fly-in fly-out mining operations and companies will establish remote control centres for automated mines in larger cities. This may decrease overall labour requirements and so reduce employment in the sector; therefore, the government should be mindful of implementing policies that ensure a fair return on the economic rent of mineral leases.     

The view from below: ‘lock-in’ and local procurement in the African gold mining sector

Through linkage creation, commodity extraction has the capacity to support local industrial production and capabilities building. Drawing on the experience of supplying inputs into the East African gold mining industry, this paper examines the constraints experienced by local suppliers arising from the purchasing procedures of large mining corporations and specialist construction companies contracted to construct these mines. Lead firms become locked-in to particular ways of working which minimise the opportunities that local suppliers have in providing products and services. After reviewing the situation for local mining suppliers in East Africa, the paper examines ways in which lead firms, the suppliers themselves and others (governments and industry associations) can better support local supplier involvement.     

The geographic concentration of world mineral supplies

Mineral reserves are unevenly and erratically distributed throughout the world; those countries which were intensively explored in the past — the USA, Canada, the USSR, Australia, South Africa, and a limited number of Asian, African, and Latin American countries — control a large share of many of the industrially important metallic minerals. Current attitudes towards exploration and the mining industry in both the developed and the less developed countries should clearly encourage rather than discourage new exploration. Given an increase in exploration, new reserves may well be found in previously unexplored areas, but any major increase in world mineral supplies will probably come from mining very low- grade deposits and developing new methods of mining and processing non-conventional ores. While it is vital to increase research and development in exploration techniques and mining and processing technology, it is also critical to maintain current levels of consumption and trade by reversing the trend towards trade restriction on the part of some of the less developed countries who are important mineral exporters.     

The African electric power sector in the context of an acute financial crisis

There has been a sharp downturn in the building of electricity production and distribution facilities in sub-Saharan Africa due to economic and financial constraints. In part this was due to the steady decline in GDP in sub-Saharan Africa throughout the 1980s. The slackening growth of demand and the continuing decline in existing generating capacity have led to a shift in emphasis towards the restructuring of electricity companies, management improvements and the rehabilitation of existing plants rather than new investment in production and distribution facilities. Nevertheless, valid doubts remain as to the ability of the African electricity sector to mobilize sufficient resources in the medium term to ensure its development.     

Corporate social responsibility, partnerships, and institutional change: The case of mining companies in South Africa

Internationally and in South Africa, mining companies are increasingly referring to corporate social responsibility (CSR) and partnerships in terms of the business case, or the expectation that being responsible and collaborating with stakeholders is good for profits. Based on a case study of platinum and chrome mining in South Africa, this article argues that the business case is circumscribed by companies’ institutional context. In the past, mining companies’ dominant interpretation of CSR has been in terms of charitable donations and support to good causes. These efforts have not alleviated the contribution of mining companies to growing social problems around the mines, primarily because they have not impacted on core business practices and have not contributed to necessary cross‐sectoral collaboration. Recently, however, there has been an important transition involving the broadening of the interpretation of CSR and increasing commitment to these issues amongst corporate leadership. Though market‐based incentives have contributed to this, the key driver has been the State's legislated transformation programme premised on State sovereignty over mineral resources. Hence, while the interrelationship between companies and their institutional context has, in the past, brought about a vicious cycle of irresponsibility and minimal collaboration, this cycle may be reversed into a virtuous one, driven in particular by the State. The broader implication is that references to a business case for CSR and partnerships cannot be relied upon independently of continued efforts at shaping the public sector context of companies.     

Ranking countries for minerals exploration

This paper presents the results of a survey of multinational mining companies pertaining to the ranking of countries for non-fuel minerals exploration in the early 1990s. It ranks countries in order of greatest exploration interest in the early 1990s, as well as countries that have geologic potential but unacceptable investment climates. It provides a list of priority commodities for exploration, the criteria for exploration levels, critical and negotiable factors in selecting countries for exploration, and the investment climate ratings of countries where exploration is probable in the early 1990s. The results of the survey indicate that major minerals exploration activities are concentrated in a small number of countries. Political and economic reforms around the world should increase the number of countries receiving active private sector minerals exploration in the 1990s.     

Small–scale mining in South Africa: Past, present and future

Mining is an important part of the South African economy and has been the driver of much of the economic development of the country. However, the small–scale mining subsector still has to realise its full potential. A small–scale mine has been defined as a mining activity employing less than 50 people and with an annual turnover of less than 7.5 million Rand and includes artisanal mines. Small–scale miners are involved in many commodities but there appears to be a bias towards gold, diamonds and quarrying for construction materials, including brickclays. Small–scale mining is regulated by the same legislation (i.e., for the environment, labour, mineral rights, exploration and mining permitting, and skills development) as large–scale mining, though compliance is low, particularly where artisanal mining in concerned. The effective participation of small–scale miners in the mining sector is hampered by their lack of skills, i.e., technical, business and management, and their limited access to mineral deposits, capital and markets. Some of these hindrances have been inherited from the imbalances of the colonial and apartheid eras and continue to act as barriers, making entrance to the industry difficult. For those who have entered the industry out of desperation, as is the case with most artisanal miners, their activities result in negative impacts evident in the inefficient, unsafe and environmentally unfriendly operations. With the advent of the new political dispensation in South Africa, a new era is dawning for the country’s small–scale mining subsector. This has resulted in a change of attitude and new government policies which have led to special programmes being put in place to promote the subsector. Intervention strategies for the support of small–scale mining (some of which are already in operation) include programmes for kickstarting mineral beneficiation and value–addition projects, development of appropriate technologies and skills and technology transfer. Proponents of small–scale mining see a well–regulated industry as being the cornerstone of future rural economic development, particularly for previously disadvantaged communities in the poverty nodes.     

How can public–private partnerships contribute to security and human rights policy and practice in the extractive industries? A case study of The Democratic Republic of Congo (DRC)

Across sub-Saharan Africa, the presence of foreign large-scale mining companies is increasing. This is in part a result of depleting resources in countries such as Canada, United States and Australia, and in part from a more favorable national mine investment climate in several mineral-rich African countries. Their increased presence raises important questions around the potential role and function of Corporate Social Responsibility (CSR) in the sector. In post-conflict and/or fragile states, CSR has further implications for conflict and risk mitigation strategies to ensure the protection of human rights. One CSR approach increasingly being considered is the public–private partnership, whereby companies, public donors, and development agencies leverage their relationships for mutual benefit. There is merit in exploring its function in post-conflict fragile states, where socio-economic needs are high and the capacity of the state to respond to a variety of mine governance challenges is limited. Two case studies from the Democratic Republic of Congo (DRC) are presented, and their policy implications, discussed.     

Patience is a virtue: Problems of regulatory governance in the Indonesian mining sector

Mining investment in Indonesia has been at a standstill for a decade. Clearly. international mining companies regard the country as a high risk destination for capital. Yet Indonesia is one of the most highly mineralised countries in the world and has expressed a desire to increase investment in the sector in the coming years. As a first step in this direction the government has introduced a new mineral and coal mining law to replace the highly regarded Contract of Work system. The government argues that this new law will reinvigorate mining investment in the country. This paper suggests that the new mining law will do little to improve the situation. Indeed, it is unlikely that Indonesia will become a preferred destination for mining investment in the foreseeable future. Poor regulatory architecture, endemic corruption, and a lack of institutional capacity continue to be of concern to investors.     

Social disruption,mine closure and housing policy: evidence from the Free State Goldfields,South Africa

The creation of mine settlements became a common practice between 1950 and 1980. These mining towns were seen as places of permanent settlement. This permanency, together with the privatisation of mine‐owned houses (mid‐1980s) increased place attachment. Mine decline thus brought with it some form of social disruption. Whereas mining companies in Australia have attempted to minimise the social disruption caused by mine closure by introducing fly‐in‐fly‐out arrangements, the post‐apartheid housing policy in South Africa has focused on asset building in mining areas. We completed 180 interviews with representatives of households. The survey formed part of a panel survey and further included a control group and 15 qualitative interviews. Our results indicate that though members of the mining community have housing units that are larger than those of the control group, incomes are lower in the mining community, real income is in decline, smaller numbers of household members are contributing to income, self‐assessments of wealth are characterised by lower ratings, household assets increase at a slower pace, and there is a stronger preference to continue to reside in the area. All of the above serves to illustrate the consequences of the asset‐based strategies embedded in South African housing policy. The social disruption associated with mine closure further tends to lock households into locations, and thus inhibits mobility.     

South African mining equipment and specialist services: Technological capacity,export performance and policy

South Africa has developed a technologically sophisticated and globally competitive mining equipment and specialist services sector. The paper provides evidence for and measurement of technological competency and global competitiveness and a brief outline of why South Africa was successful in this regard. While there are significant prospects for future growth, there are, at the same time, a number of constraints and South Africa is becoming a less advantageous site for both production and for innovation. Current government policy does not address these constraints and the sector does not feature in government’s vision for industrial or technology development. An alternative approach is proposed whereby the constraints are addressed and the companies supplying the mining sector that have sophisticated technological competencies are encouraged to spread “laterally” into new products and new global markets. By way of conclusion, the importance of this sector in developing countries where mining plays a major role is outlined.     

Green research and development (R&D) investment and its impact on the market value of firms: evidence from South African mining firms

The importance of global corporate green research and development (R&D) investment is gaining momentum and South Africa is no exception. This paper examines growing economic perceptions that green financial and stock-market systems result in heightened corporate hyperopia and therefore increase long-term and future green investment associated with R&D. It reports on the findings of a survey of 14 South African mining firms listed on the Johannesburg Stock Exchange SRI index. The study found, that, these firms’ market value showed a positive association with Green R&D. It also revealed increased Green R&D activity among large mining firms in the country and that they are highly likely to maintain their level of such investment in the coming years. The study's outcomes thus add to the body of empirical knowledge on firm hyperopia in relation to corporate greening initiatives.