Mining companies have been urged to continue developing and looking into exploration projects despite the tough economic landscape, Mining Weekly reported yesterday (16th January).

Digby Glover, CEO of diversified consulting engineering firm TWP Consulting, has explained that miners must still seek opportunities, even though PGM prices could struggle in 2009.

He noted that being selective about potential projects is the key to success and that failing to continue activities in the coming 12 months could have a worse impact in the long run.

He told the news provider: "Mining projects, particularly deep-level shaft projects, may take up to 15 years from concept to commissioning.

"Therefore, current commodity prices will have little impact on the overall project business case.

"If the cash flow is available, these projects must go ahead, as mining houses cannot decide to 'switch production on overnight'."

Mining projects have undoubtedly been affected badly by the economic crisis, with Lonmin, for instance, reporting a 31 per cent decline in platinum production at its Baobab plant in Limpopo.

A number of mines have been plagued by shutdowns, delays and cutbacks - not least in South Africa following the Eskom power crisis last January - with job losses becoming a knock-on effect.

As Wonder Nyanjowa, a metals and mining analyst at Frost and Sullivan, explained: "Lonmin has laid off 5,500 employees to trim its cost structures, whilst Anglo Platinum has halved its capital expenditure and is monitoring production levels in view of the demand for platinum."

However, Mr Glover pointed out the fact that Zimbabwe currently has the second-largest platinum ore body in the world, which is currently untapped and could offer excellent diversifying opportunities.

Furthermore, Beth Shirley, writing for Mining Weekly, explained that there are other African countries - such as the Democratic Republic of Congo - which have substantial mineral wealth.

She also drew attention to the fact that positive growth was projected for the continent's mines at the African Investment Forum of 2008, with the World Bank forecasting an increase of five per cent in 2009.

"Obviously, companies are becoming more strategically focused and there is still hope for mining in Africa," she concluded in an interview with the news provider.

Source:

Growth encouraged despite economic crisis (16/01/09)
http://www.miningweekly.com/article.php?a_id=147866

The future of mining in Africa (16/01/09)
http://www.miningweekly.com/article.php?a_id=148549

2009 to be a Tough Year for SA Mines - Frost & Sullivan (16/01/09)
http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/01-16-2009/0004955871&EDATE=