Junior Mining in South Africa
Junior miners comprise of explorers, developers and smaller
producers. The junior mining sector (JMS) as entities
that are solely in an exploring and/or pre-mine developmental phase. The mining
qualifications authority’s (MQA), centre for sustainability in mining and industry
(CSMI) and the chamber of mines regard junior miners as a mining or quarrying
operation that has between 50 and 200 employees, gross assets of between
R4.5and R18million and a turnover of between R7.5 and R30million. Junior miners
make up approximately 10% of the mining industry in South Africa. In 2018
junior miners generated revenue of R54.4 billion.
Junior
miner classification is as follows:
- Exploration companies are essential to the long-term survival of the South African mining sector. Without finding new deposits a mining economy cannot survive in the longer term. It becomes important for the state to support a high-risk activity such as exploration, which largely relies on venture capital markets, by providing incentives for investment.
- Developers take a known deposit and build the mine with a view to moving on into production. The research done at the Minerals Council on the junior mining sector shows that most junior mining companies in South Africa who are explorers and developers wish to become established as miners in the long term.
- The third category of junior miners in South Africa consists of smaller and mid-tier producers who typically buy a small operation with the intention of mining. The Minerals Council defines these producers as having an annual turnover of below R500m per annum. They are found in most mineral commodities – coal, gold, platinum, manganese, chrome and diamonds as examples. The biggest concentration is in coal with many being wholly owned and managed BEE companies.