Picture: 123RF/RONNARONG THANUTHATTAPHONG
Picture: 123RF/RONNARONG THANUTHATTAPHONG

SA’s mining charter was unclear during the last commodity super cycle and the country ran out of power. We have the same conditions today. Own generation can help alleviate the power shortage (and contribute to solving the country’s energy and green dilemma).

In terms of a discounted cash flow, we have high uncertainty in cash flows and a high level of uncertainty in the rate at which those cash flows are being discounted — in other words, sovereign risk. Government is the constraint and we’re going to miss another golden egg unless it acts.

With commodity prices at attractive levels, the market is increasingly concerned that the government might score another own goal or two, during the commodity super cycle, which will not only dampen corporate earnings but also tax revenue.

Michael Avery spoke to Henk Langenhoven, chief economist at the Chamber of Mines; David Holland, of Fractal Value Advisors and adjunct professor at the University of Cape Town Business School; and Peter Leon, respected mining law expert, partner at law firm Herbert Smith Freehills and the global co-chair of its Africa Group.

Michael Avery talks to a panel about the current attractive commodity levels .

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