Representatives of law firm Beech Veltman will attend the Investing in African Mining Indaba – to be held at the Cape Town International Convention Centre from February 6 to 9 – to discuss and address the challenges facing the mining and natural resources industry across Africa.

Beech Veltman will showcase a team of lawyers with extensive mining expertise who are “well positioned to assist the mining industry in navigating its many challenges”, says Beech Veltman partner Melanie Hart.

The firm will participate in workshops, events and functions, and aims to disseminate the thoughts and themes of the event to benefit the mining and natural resources sector.

“Our role is to listen and, where appropriate provide input. After Mining Indaba, we will consolidate some of the key themes that have been debated and communicate these to our clients, particularly those who cannot attend, to ensure that discussions at Mining Indaba are considered broadly among stakeholders in the months after the event,” says Beech Veltman CEO Warren Beech.

He notes that, while enthusiasm in the African mining sector has decreased over the past few years, Africa still presents “ample opportunity” for investors in the mining and natural resources sector.

Hence, the firm will work closely with relevant participants to connect attendees and companies to aid and encourage critical investment in the sector, as well as investment in startup operations and the establishing of new mines.

“The Indaba is a networking opportunity to meet with existing and prospective clients; network with peers; keep abreast of global, regional and national trends; and obtain insight across key mining jurisdictions worldwide,” enthuses Hart.

The firm will also engage in discussion topics, such as the increase in illegal mining in Africa and the evolving artisanal and small-scale mining sector, which Beech says needs to be regulated to ensure that the extraction of minerals in every country is optimised to benefit all citizens.

“Our intention is to participate in as many discussions and initiatives as possible to understand the impact of the economic crisis – that started before and continued throughout the Covid pandemic – on the mining and natural resources sector.”

African Legislatvie Changes

With the theme of the Mining Indaba being unlocking African mining investment, Beech outlines recent legislative changes that may help – or hinder – investment appetite in the African mining industry.

He notes that Zimbabwe President Emmerson Mnangagwa implemented a policy in November 2022 whereby royalty payments made by mining companies to the State will be paid partly in beneficiated minerals, and partly in local and foreign currencies.

In so doing, Zimbabwe aims to increase its reserve of strategic minerals such as gold, diamonds, platinum-group metals and lithium.

Beech expects many African countries to follow a similar model to encourage local beneficiation and the creation of reserves of beneficiated minerals.

Moreover, while there have been political and regulatory developments in countries such as South Africa, Tanzania and Zimbabwe, he says some legislative changes were seen as negative, owing to their impact on royalties and the ability to own and operate mines in these countries.

However, Beech enthuses that investment appetite for some African countries, particularly in West Africa, has improved.

He attributes this improvement to the maturing of banking structures, financial and legal institutions, investment-friendly policies and regulatory frameworks, as well as national development plans that demonstrate governmental support for sustainable infrastructure and development.

Yet, with the perceived risks in the mining and natural resources sector, such as security, responsible sourcing, the increased focus on environment, social and governance principles – which Beech says may be more challenging to address in certain countries – and the growing concern surrounding policy and regulatory uncertainty, he says the more risk-averse investors are “extremely cautious” about investing in the mining and natural resources sector across Africa, including in West Africa.

Institutional and other long-term investors also tend to focus on the rule of law and access to a robust court system which provides more certainty for investment decisions across the continent.

Where there are concerns about the application and interpretation of the rule of law, and access to courts in a particular country, Beech says this typically has a negative impact on investment decisions.

“It is not all doom and gloom – there are still many investors that have a good risk appetite and are prepared to invest in Africa. As the world transitions to a green economy, demand will increase for all minerals – especially battery minerals – which form part of, and drive, the green economy. Safe-haven minerals, particularly gold, are also likely to continue driving investment and are seen as a protection against cyclical demand and pricing.”

Beech cites the example of Tanzania that has recently made various policy changes to encourage further investment in its mining sector, with Beech stating that Tanzania is “making good progress”.

He adds that, owing to the economic downturn over the past three to five years, laws are likely to be relaxed to accommodate investment in the mining and natural resources sector.

Beech Veltman believes that the mining and natural resources sector can continue playing a critical role in the growth, development and transformation of many African countries.

Hence, Beech says the sector should be given an opportunity to fulfil this role through identifying and addressing challenges in a structured, holistic manner.

“The mining sector faces challenges that require innovative solutions, particularly from a legal perspective. The Mining Indaba brings together policy and decision-makers and industry stakeholders to exchange ideas, and discuss and debate mineral law and policy to address the challenges in the sector,” concludes Hart.