Mining exploration spending on the rise

MBONGENI MGUNI
Staff Writer | Wednesday October 20, 2010 00:00

 

In 2008, mining companies spent P246 million in exploration, and while the figures were originally projected to rise to P257 million by end of 2009, the global recession eroded exploration budgets as miners tightened their belts. The mines department is able to gauge exploration activities through quarterly and annual budgets, development programmes and exploration reports carried out by prospective licence holders.

Although budgeted and actual spending for 2010 will only become known next year, senior department officials have noted increased exploration activity across the hundreds of prospecting licences in issue. Leading the activities is exploration in minerals such as coal, coal bed methane and uranium, all energy minerals whose developers are eyeing the regional shortfall in electricity.

Yesterday, DGS Director Tiyapo Ngwisanyi told Mmegi that exploration activities were stirring countrywide after last year's recession. 'We have had companies that have reported that they are now in a position to drill, which is a major exploration activity,' he said.

'When companies scale down their activities, they simply conduct office work and stop any progress in the field. We are also seeing a number of applications for prospecting licences, although this is not a big increase.'

Ngwisanyi said Chinese mining explorers who held 111 licences in 2009 were still active. 'The Chinese explorers are still coming through and those who already held prospecting licences are still active,' he said.

Top spenders in exploration this year include Anglo Coal, Saber Energy, KSE, Discovery Metals Limited, Hana Mining and Mount Burgess who are mainly engaged in energy minerals.

BCL Mine, where efforts to extend the mine life are underway, is also expected to be among top explorers this year. The copper and nickel mine will soon spend P215 million deepening one of its shafts to enable production until 2013.

Annually, the Department of Geological Survey faces difficulties gauging the exact level of exploration underway or planned, as many companies fail to report their activities and exploration budgets.

According to the Mines and Minerals Act, prospecting companies are required to declare their exploration budgets annually and provide information on actual expenditure and technical reports regularly. However, the incidence of non-reportage is high.

At present, DGS officials are preparing statistics for 2009 exploration spending, using minimum budget estimates provided by the explorers and the annual reports they submit to the department. The statistics will also be compared with regional data in order to analyse exploration trends.