Ensuring a robust mining industry for the future requires careful capital allocation and adhering to high standards of operation, while consolidation may be the next phase for a sector grappling with increasingly challenging circumstances, finds a panel hosted during the 2025 London Indaba.

The panel of speakers included Ninety One portfolio manager George Cheveley, VanEck senior metals and mining analyst Charl Malan, JB Management CEO and co-founder Justin Baring and Manara Minerals director Jim Rutherford as the facilitator.

When assessing where to invest, Cheveley said geography was important but so was diversity – to not be concentrated in any one region. “There are good returns to be made in mining, not just the share price, but total returns.”

His firm considers the capital cycle as a way to try and gauge future prices.

“When prices are low, capital withdraws from that business and future returns may be higher than in the past, for example. Additionally, the possibility of political risk changing, where the discount rate is punitive at one stage and less at another, can ensure that investors get back more than what they paid for assets,” he said.

Adding to the question of whether geology was important for investors, Cheveley explained that a good management team that could realise value was essential, particularly across spread-out geographies.

Malan, in turn, said mining companies’ management often made promises of value creation and did not deliver; therefore, companies needed to show capital will be coming back to shareholders.

“We need to work harder at this and perhaps consolidation is needed.

“The industry has changed; traditional sources of funding have changed. You need to get close to your shareholders and make it easier for them to get closer to you,” Malan explained.

Moreover, Baring emphasised consolidation as a means to manage the risk and size of large projects.

Malan agreed, pointing out that capital requested to build projects was often higher than a company’s market capitalisation, which was not appealing to investors.

Responding to the question of what the relevance of Africa was from an investment point of view, Baring said that, despite the region not receiving a significant share of global exploration or expansion investment, there were massive opportunities.

He noted that African companies were eager to work with investors to ensure returns for shareholders and benefits for a broader base of stakeholders; however, political risk and government’s willingness to enable mining business was very cyclical.

Cheveley agreed that there were cycles to governments and their sentiments, hence the need for active investment where conditions were monitored and relationships were maintained.

Commenting on South African mining investment, Malan pointed out that, for the better part of the last 15 years, many of VanEck’s investors had very little to zero exposure to South African assets; however, this was changing, with investors showing greater interest in investing in South African gold and platinum operations.  

Malan admitted that the investment landscape had become more competitive with other sectors vying for investment and VanEck’s clients had less than 2% of their investments in the mining industry.

Moreover, Rutherford highlighted the increasing role of sovereign wealth funds in mining, adding that access to raw materials was on national agendas and so there was a good rationale for sovereign wealth funds to play a bigger role in mining.

This was also necessary given the demise of specialised funds in many regions, which were the route to money for many smaller companies.

“More countries are thinking of life beyond oil and ensuring prosperity for a growing, young population.”