Indaba Starts With Optimism And With Trepidation, But One Things Certain: Cape Towns A Great Place To Hold A Conference.
By Our Man in Oz, in Cape Town / www.minesite.com
More delegates, but plenty of uncertainty as to how things are panning out. Thats a snapshot assessment of the first day at the annual Mining Indaba conference in Cape Town. The head count, according to organisers is around 4,000 delegates versus 3,800 last year, when miners and bankers stayed away in droves. This year, the first big mining conference to be held since the end of the global financial crisis, Indaba is expected to serve as a pointer as to how the mining sector will perform in 2010. And if comments from delegates at the Cape Town Convention Centre are a guide then both bankers and miners are delighted to have simply made it to the meeting, but no-one is expecting an overnight miracle.
Craig McGown, an Australian investment banker who is a regular at Indaba, believes bankers are taking the lead in the curious mating game that is played out behind the scenes at big resource-sector conferences. The bankers need this years bonus, thats why theyre keen to deal, he said. Miners are more cautious because theyre thinking about 10 years of revenue rather than a short-term fix.
Day one at Indaba is not the official start of the event. Thats day two. Minesites man will not try and explain why the event has a sort of false start, but is reminded of a comment made about South Africa on his first visit in 1984: Welcome to South Africa, where clocks run backwards and water flows uphill.
Formal talks on day one all involved commodity forecasting, and delivered a steady stream of observations about rare metals, uranium, iron ore, gold and copper. Somewhat predictably most forecasts were optimistic about the outlook, though a clear message was that 2010 will be a year when supply issues dominate demand.
Having said that it is also worth pointing out that no-one could really take away a clear picture of what to expect over the next 12 months, as seen in this simple example from the talk by Kevin Norrish of Barclays Capital about the copper market. In a generally positive view of the copper market which centred on the central role of China, Norrish said the copper price could pass the US$8,000 per tonne mark in the first half of the year, as he showed a slide which had a peak copper price of US$7,800 per tonne. Nit picking? Perhaps, but when the words dont match the table it leaves a degree of uncertainty, and adds to a belief that no-one really knows what lies ahead, as the world crawls out of the financial crisis.
David Hale, a prominent American forecaster of the future, made a series of underwhelming observations, pointing out with a flourish of hand waving that China will play a leading role in the world commodity sector for decades to come. Golly! Really? Hale also sang the praises of the US corporate sector for laying off a record eight million workers and said better times would return another remark in the we all know that category. But the best was an observation that the world (especially Africa) needed nuclear power to solve its long-term power needs at which point Minesites Man started to drift off.
Better news will come on day two at Indaba when companies get their time in the sun, and the forecasts fade as all forecasts do. Thats when companies such as Nkwe Platinum, Centamin Egypt and Peninsula Minerals get time at centre stage, and lesser-known companies such as Australian-listed Sabre Resources also get to catch the ear of casual observers and explain what theyre achieving on the exploration front. In Sabres case that involves a grass roots copper discovery close to the historic Tsumeb copper mine in Namibia making it one of Africas the more interesting exploration stories. Keep an eye on Minesite for more about Sabre in the next few days.
If optimism tinged with uncertainty is the mood, so far, at Indaba then one aspect of the event is more certain. The location remains one of the great places in the world to hold a conference. The weather is fine, if slightly overcast, but with the temperature around 24 degrees it is easy to see why Indaba is a major attraction to snap-frozen London-based investment bankers. Even if the deals dont flow, the beer does.
PEN Price at posting:
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