As global gold and copper discovery struggles to keep up with demand, the SA government has allocated R240m to junior miners trying to find deposits within the country.
Gold and copper were among the handful of minerals targeted by the second window of the government’s Junior Mining Exploration Fund (JMEF), which opened on Tuesday.
Other targeted minerals include lithium, titanium, uranium and fluorspar, all of which are classified as critical minerals in SA by the department of mineral & petroleum resources, as well as tin, tungsten, arsenic and antimony.
Launched in 2023 by the Council for Geosciences and the Industrial Development Corporation, the JMEF is a R400m fund aimed at reviving exploration investment and accelerating new mineral discoveries in SA.
It helps eligible SA junior miners with valid prospecting or mining rights to access funding for their prospecting work and increase their access to mine ore bodies.
In the first window, the fund allocated R160m to eight applicants across different areas of the mining sector and the country. The second window will close at the end of this month.
Successful candidates can use the funding for early-stage discovery exploration activities, such as drilling, logging, geophysics surveys and environmental studies, as well as advanced exploration activities such as metallurgical testing, environmental impact assessments and feasibility studies.
The push to revive new mine discovery comes as weak investment in exploration plagues SA mining, with outlays on mineral exploration falling from a peak of more than R6bn in 2006 to less than R1bn last year.
The Minerals Council SA, which represents the interests of the country’s biggest mining houses, has highlighted SA’s failure to boost exploration spending as a critical concern for policymakers, particularly as the global demand for critical minerals is rising, imposing opportunity costs on the local sector.
In terms of copper, global demand is expected to surge by more than 40% by 2040 while new mined supply dwindles, making prospecting and exploration increasingly attractive and putting copper at the heart of deal-making activity in the global mining sector this year.
A report by the UN Conference on Trade & Development estimated that 80 new copper mines and $250bn in investment were needed to meet global copper demand by 2023.
Global spending on gold exploration has also failed to keep pace with the metal’s price rally, with a recent report from S&P Global Commodity Insights showing global exploration budgets fell by 15% in 2023 and 7% last year, thanks largely to elevated interest rates raising borrowing costs.
With gold prices up more than 47% since December, on track for their best year since 1979, SA risks missing out on the precious metals boom as the country’s exploration investment lags behind that of its mineral-rich peers.
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