SA mining in crisis – CoM

According to the head of the Chamber of Mines of South Africa, the South African mining industry is in crisis.

Roger Baxter, Chamber of Mines of South Africa chief executive officer, spoke at the Paydirt 2017 Africa Downunder conference in Perth, Australia. He said that business confidence in South Africa was at its lowest levels in more than three decades.

Chamber“The South African mining sector is renowned for its long cold winters and short hot summers. Key governance and policy challenges in South Africa have eroded business and investor confidence, undermining investment,” Baxter said. He added that policy and regulatory uncertainty had frozen potential new investments in the sector. “Real mining fixed investment has shrunk over the past two years. The industry made an accumulated loss of over R30-billion in 2015. In 2017, 65% of RSA platinum mining is loss-making,” he said.

Baxter explained that since 2013, South Africa’s policy perception index (report card of investment attractiveness of policies) has deteriorated to 84th out of 104 jurisdictions. He said despite the country’s potential, policy and regulatory uncertainty were big deterrents to investment.

He said critical factors affecting South Africa’s investment attractiveness, included:

  • Uncertainty regarding the ownership element of the mining charter.
  • Uncertainty created by the DMR’s unilaterally developed and imposed reviewed mining charter (RMC17).
  • Uncertainty regarding the finalisation of the MPRDA Amendment Bill which is incomplete after being published nearly five years ago (remaining uncertainty on s11 approvals).
  • Uncertainty regarding the Minister’s proposed s49 moratorium on new right and s11 applications.
  • Uncertainty created by double financial provision for environmental rehabilitation.

“In essence, there is a freeze on investment (it is extremely difficult to get an investment committee to approve any new Greenfields project in RSA). The industry is of the firm view that the DMR’s RMC17 is designed to benefit a select few at the expense of the whole country,” he concluded.

Image credit: Chamber of Mines


 

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