School of Mining Engineering (ETDs)

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Assessing the Challlenges in the Valuation of Early-Stage Secondary Diamond Deposits
(University of the Witwatersrand, Johannesburg, 2024) Ganda, Nair da Conceição de Oliveira Gavião; Marshall, Tania R.
Diamond mining is a fundamentally important part of the economy in many countries. Globally, some of these countries are home to early-stage alluvial diamond projects that attract significant interest from investors. Often, these investors need to understand the project’s value to make informed decisions. However, valuing early-stage alluvial projects is a complex and challenging process. This research report identifies and assesses the challenges associated with the valuation of early-stage alluvial projects through a case study of a project in Angola. For the case study, a valuation exercise was conducted using both the Cost Approach and the Market Approach. The research identified challenges specific to the Cost Approach, such as data availability and compliance with internationally recognised Resources and Reserves reporting codes. Likewise, challenges specific to the Market Approach included estimating current commodity prices and checking the performance of alluvial diamond properties on an applicable stock exchange. Additionally, it became clear that complications related to both approaches, such as experience and resource estimation methodologies, need to be addressed before a final valuation range can be determined. Although there are several difficulties, the valuation of early-stage alluvial projects is still possible. Nonetheless, these challenges impact the accuracy, consistency, and interpretation of the valuation results. Therefore, becoming familiar with these challenges and the recommendations made in the report will help valuators avoid potential pitfalls and contribute significantly to the field by guiding more informed decision-making in the valuation of early-stage alluvial diamond projects.
The Impact of Digital Technology in South African Coal Mining: A Financial Performance Analysis of Anglo Coal American, Bhp Billiton and Glencore
(University of the Witwatersrand, Johannesburg, 2023-10-27) Maluleke, Reply; Neingo, Paskalia; Marshall, Tania R.
Digital technology, typically, refers to electronic tools, resources, devices and systems that store, generate and process information rapidly. Digital technology and innovation are among the initiatives that can assist mining companies to realise productive, efficient, profitable and sustainable mines. As such, the mining industry is taking steps towards digital technology and innovations that have evolved in recent years. The objective of this report was to discuss the financial impact of digital technology of the selected South African thermal coal mining companies namely Anglo American Coal Division now operating as Thungela Resources, Glencore, and South32, previously spun out of BHP Billiton and now operating as Seriti Resources. Coal mines were selected for analysis, due to their importance with respect to energy generation in South Africa. Industry cost curves over the period 2013-2019 were constructed as part of the financial analyses to show the trend of the selected companies’ unit costs. The research also used other financial analysis methods such as operating profit, profitability ratios, Economic Value Add and Du Pont analysis to analyse the performance of these companies. There appeared to be no production and unit cost improvement directly linked with investment in digital technology, as breakdowns, commodity prices, depletion of reserves, selling of operations, mine closures, high contracting prices, inflations and other factors also affected these parameters. Results for Anglo Coal and South32 did not indicate consistent good or improved financial results in all the financial analysis methods post the investment years in digital technology, in contrast to Glencore’s results which did. Glencore also invested more capital in digital technology as compared to Anglo Coal and South32. It is suggested that this may be one reason for its success. Consequently, it is recommended that companies looking to invest in digital technology follow the example of Glencore and invest as much capital as possible in this venture in order to maximise its potential.