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Interview with Lara Smith, Core Consultants Ltd.

In our second speaker interview we spoke with Lara Smith, Managing Director of Core Consultants Ltd. Lara talks us through the challenges and opportunities facing the South African Ferroalloys market.


You can hear more from Lara Smith and the South African Ferroalloys market and challenges it faces at the South African Ferroalloys Summit on 11 November in Lisbon, as part of the 34th International Ferroalloys Conference





Metal Bulletin (MB): Hi Lara, thanks for agreeing to take part in this interview. Can you please introduce yourself?


Lara Smith (LS): I’ve been a commodity analyst for over a decade. In 2009 I founded Core Consultants to provide market analysis and consulting services to the mining and metals industry. This was the first dedicated market commodity analysis firm in South Africa. As such, ferroalloys was a big part of our service offering. In 2010 we launched the ferrochrome subscription and this was followed by a manganese subscription in 2012. Since this time we have conducted over 60 market analysis studies across 30 different commodities.

Today trends in portable technology and battery manufacturing have started to drive investment into the mining industry. Lithium, cobalt, rare earths and vanadium have become a focus area for us over the last 5 years and is a big part of our client base. We spend a lot of time assisting these mining clients who need project funding with how to get their messages across to investors, develop a professional content strategy and what economic inputs to include in prefeasibility and feasibility studies.


MB: You will be presenting at the South African Ferroalloys Summit (part of the IFA conference). In your opinion, what are the three biggest challenges for the South African ferroalloys market?

 
LS: Political change and uncertainty is a major factor for business as a whole in South Africa right now. Changes to the mining code, upcoming elections and the general malaise in the country has deterred investment and it makes it challenging to operate efficiently in the country right now.

Utilities and resources is an ongoing saga- efficient transport, sufficient electricity- but at what price? Labour unrest- higher wages, but productivity is not following higher wages.

Zama Zamas- SA is awash with illegal chrome miners and traders right now. Very challenging to determine the principal if you are trying to trade. Also to determine whether the material is mined legally. KYC’s are imperative.

Then there’s the general asymmetry of market access. There are communities that own chrome for instance, but don’t have the resources to bring it to a warehouse. But there isn’t capital that they can borrow. So these guys can’t access the market at market rates. They would have to sell to an established player for well below market rates. This keeps the money circulating in the hands of a few, rather than spreading the wealth to the country and those that need it. This is the issue with South Africa in general- the wealth stays in the hands of a few elite or established businesses.



MB: How have the recent South African governmental changes affected the mining sector in South Africa?


LS: Corruption seems to have increased, rather than abating. Downgrades to the country’s credit rating has sent the rand plummeting and deterred investors. A lot of investors can no longer invest in South Africa. This has meant that IRR’s and the cost of borrowing has increased, but productivity has continued to decline.



You can hear more from Lara Smith and the South African Ferroalloys market and challenges it faces at the South African Ferroalloys Summit on 11 November in Lisbon, as part of the
34th International Ferroalloys Conference.  

 

This content is provided by Fastmarkets MB Events for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.