Cyril Ramaphosa and Gwede Mantashe out to woo mining indaba
Ramaphosa and mineral resources minister Gwede Mantashe will have an audience of about 6,000 delegates gathering in Cape Town
As an indication of the seriousness with which President Cyril Ramaphosa is taking the hunt for investment, he will be the first sitting SA president to address the mining indaba in Cape Town this week.
Policy stability and investment attractiveness are likely to be the two messages delivered on Tuesday afternoon by Ramaphosa, who has been in office for a year, after inheriting a government rotten with corruption and years of underperformance. This has stifled the economy, contributing to a third of adults being unemployed.
Mining in SA has for years had to contend with high costs, labour unrest and regulatory uncertainty, with the resultant job losses pushing employment in the industry down to 450,000, from more than 500,000 a decade ago.
Ramaphosa and mineral resources minister Gwede Mantashe will have an audience of about 6,000 delegates gathering in Cape Town. They will have until Thursday, the day the president delivers his state of the nation address, to persuade international and local investors and companies that SA, once a global mining powerhouse, is a good place to put their money and to create jobs.
The indaba will be attended by 35 ministers from across Africa, requiring Ramaphosa and Mantashe, who opens the conference on Monday, to deliver solid and meaningful assurances to the delegates.
Opportunities such as these have been squandered by a succession of ministers, most notably Mantashe’s predecessor Mosebenzi Zwane, who failed to give delegates any confidence that SA should take precedence for mining investments ahead of rival countries in sub-Saharan Africa. These countries are improving their regulatory regimes in an increasingly competitive global market.
"In minister Mantashe, we have a minister willing to engage and listen, not only over broad policy issues, but also the detail of what different mining sectors need to develop and grow into the future," said Minerals Council CEO Roger Baxter.
"That does not mean that we agree on everything, but being able to engage is a very important starting point," he said.
In its own engagements with investors and other delegates, the council had a positive message to convey, he said.
"From the Minerals Council’s perspective, we will highlight that the business and mining environment has changed beyond recognition since a year ago. That doesn’t mean that the mining industry in SA is without its challenges — we have the damage done to the investment climate over the past 10 years, the state of state-owned enterprises, and particularly Eskom, which are critical factors for mining," he said.
One of the key assurances investors and companies will need to consider before putting their money into SA’s mineral industry is that their long-term investments and assets will not be threatened in any way by the ANC’s plan to expropriate land without compensation.
One of Mantashe’s prime objectives when appointed to his role a year ago was to re-establish a relationship with the mining industry, which Zwane had all but destroyed.
Mantashe immediately opened talks on the creation of a new mining charter to replace the deeply damaging document Zwane had gazetted and almost immediately suspended in the face of a court challenge from the council.
Mantashe has also scrapped the controversial amendments to the Mineral and Petroleum Resources Development Act, which had been in the works since 2012 and had cast a pall of uncertainty over the local industry.
Mantashe, who is seen by industry players as weeding out corruption in the department at provincial offices, has spoken of working actively to hive oil, gas and petroleum out of the act, creating far more focused legislation for mining companies.
While the days of multi-national mining companies holding a broad range of investments in SA appear to be largely over, apart from Anglo American’s, there is plenty of scope for
junior to mid-tier companies and explorers.
The new charter gazetted late in 2018 has not specifically excluded junior companies from many of the onerous obligations that underpin a mining right.
"We also want to see more clarity about how the department is going to encourage exploration and the junior mining sector. That’s where the future of SA’s mining lies and we really do need a lot more clarity and assurance around these segments," said Andrew Lane, Deloitte’s African resources and mining leader.