Picture: SOWETAN
Picture: SOWETAN

SA’s mining industry stayed steady in the eyes of investors, with a slight slip in the way policies are perceived, according to the latest data from the Fraser Institute.

Canada-based Fraser Institute has released its annual survey of mining companies conducted at the end of 2019. The survey was based on 263 full and partial responses to 2,400 questionnaires sent to mining and exploration companies.

The 73 jurisdictions included in the latest survey include Canadian provinces, US and Australian states, and a handful of countries in Africa, Asia, Europe and South America. This is the smallest number of jurisdictions yet in the survey and  is down from 83 measured in 2018, showing a steady decline from 122 jurisdictions in 2014.

The survey is closely watched by companies, mining lobby groups such as the Minerals Council SA, and mining ministries like the department of mineral resources & energy, which uses the metrics as a measure of the efficacy of its actions.

In the latest survey, SA ranks 40 out of 76 jurisdictions, barely changed from the 43 out of 83 jurisdictions when measured in the catch-all general investment attractiveness index. Its score fell to 59.7 out of the best possible 100, down from 64.6 a year earlier in this broad category.

When it came to perceptions about labour militancy, work disruptions and labour regulations, SA came in at 11th from the bottom.

For the local industry, the policy perception index is important given the state of flux in the regulatory environment where the Minerals Council SA has lodged papers in court opposing elements in the third iteration of the Mining Charter, thereby prolonging uncertainty.

SA was 56th out of 76 jurisdictions in the policy perception rankings compared with 56 out of 83 a year earlier but its score fell to 59.7 from 64.4.

Under former mines minister Mosebenzi Zwane, who unilaterally imposed a deeply unpopular and damaging charter on the industry in 2017, SA ranked 81 out of 91 jurisdictions that year, its lowest point in the survey, with a score of 42.7. Since 2017, SA has improved sharply in the rankings. 

The council flatly refused to work with Zwane, citing concerns about his alleged tainted political past and involvement with the Gupta family. Zwane actively participated in securing the rights to the Optimum Colliery by visiting Glencore CEO Ivan Glasenberg in Switzerland to argue the family’s case.

State power monopoly Eskom was alleged by former public protector Thuli Madonsela in her state capture report to have made life impossible for Glencore at Optimum and to have bent over backwards to fund the Guptas’ ownership and running of Optimum.

Under ANC stalwart and veteran Gwede Mantashe, who took over as minister early in 2018, SA has risen in the Fraser Institute rankings as he scrapped years-old proposed amendments to the Mineral and Petroleum Resources Development Act and unceremoniously ditched Zwane’s version of the Mining Charter.

Based purely on mineral potential, given all other elements about policy and secondary factors being equal, SA ranked 34 out of 76 on its resources endowment, weaker than its 30 out of 83 jurisdictions a year earlier. Strangely, under Zwane in 2017, SA ranked 21 out of 91 jurisdictions when its mineral endowment was assessed.

seccombea@businesslive.co.za