We have confidence in Mantashe, Minerals Council CEO tells investors
Mineral Resources Minister Gwede Mantashe was lauded at an investor conference for the progress he has made in addressing concerns of stakeholders in the mining industry.
Minerals Council of South Africa CEO Roger Baxter was addressing the Africa DownUnder conference in Perth, Australia on Thursday. He expressed optimism regarding SA’s mining, and the industry’s appreciation of the minister.
The council represents 90% of SA mining companies.
This was a 180-degree turn from last year's address at the conference, which is the largest African-mining focused event outside the continent.
At the time, Baxter slammed former minister Mosebenzi Zwane for a lack of engagement with the industry, especially in drafting the Mining Charter 2017. He also spoke about how the governance and policy challenges had a negative bearing on business and investor confidence.
In this year’s address, Baxter noted that there had been issues undermining SA's competitiveness, such as a lack of policy certainty, corruption and a lack of trust between stakeholders.
But he acknowledged that there had been positive developments since February 2018, when President Cyril Ramaphosa instituted changes.
These included steps to address corruption and the appointment of Mantashe as Minister of Mineral Resources.
"Since his appointment, Minister Mantashe has worked hard to overcome the trust deficit between stakeholders [and] has engaged all parties in a frank and open manner," said Baxter.
Baxter specifically spoke to the progress made in the Mining Charter. Mantashe has consulted with various mining communities in stakeholders, and held a Mining Summit in July to iron out issues in the Charter.
"While some issues remain in respect of the new Mining Charter, we are hopeful of an outcome that promotes both transformation and investor confidence, which will ultimately ensure the growth and viability of our sector," Baxter said.
Baxter said although there was still more work to be done on the charter, stakeholders were working together. "The processes are certainly pointing in the right direction."
Baxter also spoke of SA's unrealised mining potential.
The Fraser Institute, in its 2017 rankings, places SA in the top quartile (20 out of 91 mining jurisdictions) in terms of mineral potential; assuming best policy and regulatory practice. However, SA’s mineral policies are ranked 81 out of 91 – indicating a mismatch between mineral potential and policy scores. The ranking for mining investment attractiveness is 48 out of 91.
Baxter also pointed out that the real net capital formation in mining declined 50% between 2013 and 2017.
He said there was a way to turn the situation around by implementing ethical leadership and good governance, ensuring policy and regulatory certainty, improving productivity and competitiveness, and ensuring efficient, competitive and reliable infrastructure.
"South Africa’s mining potential is huge ... mining investment could almost double in the next four years if the country were to return to the top 25% of the most attractive mining investment destinations worldwide," he told the conference.
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