INDUSTRY INSIGHT | COAL JUNIORS juniors The economy will soon be relying on a new generation of black-empowered junior coal miners to build well-resourced and effi cient mining operations – a task that needs suffi cient investment upfront and rapid development of in-house expertise. BY LESLEY JEFFREY, SRK CONSULTING (SA), PRINCIPAL COAL GEOLOGIST F orecasts estimate that South Africa will need another 80 Mt of coal annually over the next 10 years, which is likely to require private sector investment of about R100 billion. This demand, alongside efforts to transform the mining sector, is leading to substantial opportunities for new entrants. The challenges faced by these junior coal miners, however, includes a lack of in-house skills and insuffi cient levels of early-stage funding. SA’s coal sector has generally been dominated by large players with their own in-house expertise and strong balance sheets to leverage finance for new projects and expansions. Junior mining companies often don’t have the luxury of these resources in their early days, and this can severely hamper their growth and evolution into larger, sustainable enterprises. Some of the large coal corporations are looking to off-load certain of their local coal mines and projects 10 MINING REVIEW AFRICA | MAY 2015 However, there are ways to avoid becoming debilitated by these constraints – by ensuring high standards right from the start. Junior miners need to build their technical credibility from day one, by getting the best advice based on high- quality studies and plans. A key element of this expert input is that it should be respected by the investment community, as the integrity of the feasibility and other studies is the foundation upon which investment can be leveraged. Here at SRK Consulting – a global network of engineering consultants focused on mining and related services – we are often approached by smaller ventures with coal projects in mind. Our broad range of skills and experience allows us to build a foundation of quality data, options and recommendations for the client – so that they can approach financiers with credibility and integrity. We work regularly with global financial institutions, as they respect our independence, experience and expertise. However, it is often the case that these start-up companies are undercapitalised, and they end up cutting corners when they research and plan their projects. This does them no good when the time comes to try and raise finance for turning the plans into an operating mine. These concerns come into sharper focus when considering the nature of many of the coal assets now coming onto the market in South Africa, as some of the large coal corporations look to off-load certain of their local coal mines and projects.