AMN - Indaba buoyed by new sense of hope – comment by Yolanda Torrisi

Although South Africa’s ongoing Mining Charter has left a dark cloud over this year’s African Mining Indaba in Cape Town, it appears a new sense of hope is creating some light at the end of the tunnel.

The conference has again attracted a big crowd of people involved in the mining industry throughout Africa and it is encouraging for regular attendees to feel the confidence that is beginning to emerge.

Yes, the Mining Charter has not gone away and the industry in South Africa needs a positive outcome sooner rather than later to remove the uncertainty, but there are green shoots appearing in South Africa and throughout the continent.

These shoots are being watered by improving general conditions in the mining industry and increasing injections of capital, as has been evidenced at other investment conferences around the world in the past 12 months.

South Africa Chamber of Mines CEO Roger Baxter mirrors these sentiments. He said this week: “For the first time in a number of years, it is possible to look forward to reasonable hope, rather than foreboding … there are definitely some real positive green shoots.

“There are some positive winds of change blowing through the country and through the industry. It gives us a new confidence that a resurgence is taking place in the industry for the year ahead.”

He said the initial signals from the leadership of South Africa’s ruling ANC party allowed the chamber to be cautiously optimistic; however, he stressed that this has to be followed by real action, as well as real resolutions for some matters, including the Mining Charter.

Baxter further acknowledged that, while there are complex political dynamics at play, the chamber is keen to work with government and other stakeholders in getting the potential of this great industry back on track, which means “new government, leadership and rapid improvement of governance, and a focus on real issues holding the industry back”.

Based on the latest statistics, the mining industry contributed 6.8% to the country’s gross domestic product (GDP) in 2017, compared with 7% in 2016. In real terms, the industry was estimated to have expanded by 3.7% in 2017, contributing R312 billion to GDP and this was partially due to an increase in production.

The industry contributed R93 billion to fixed investment, while employment was estimated to have increased by 1.6% to 464,000 during 2017, which could be partially attributed to growth in the industry.

And this has been achieved under the shadow of the mining charter, which is before the courts.

While concerns have been expressed by many at the Indaba and the Mineral Resources Minister Mosebenzi Zwane did little to ease the concerns during his address at the opening of the event, a number of industry leaders, including Baxter, have indicated that they are buoyed by recent statements by the ANC’s pending new leadership under deputy president Cyril Ramaphosa.

During his recent trip to the World Economic Forum, Ramaphosa said that if the Mining Charter is standing in the way of the development of the mining industry, then it needs to be looked at. He also stated that corruption will not be tolerated.

Anglo American South Africa deputy chairperson Norman Mbazima told delegates the company was encouraged by Ramaphosa’s comments, which appeared to be a step towards restoring investment in the sector. He said the political environment is a shaping force of the industry, adding that the outcome of the ANC elections were credible, and a “significant first step towards stabilising the political dynamics” of South Africa. “We urgently need to get investment back on the agenda for South Africa.”

South32 president Mike Fraser also acknowledged the change in ANC leadership, saying he hopes the “healthy dose of Ramaphosa medicine” will be delivered to other parts of the economy, as it was at Eskom with the appointment of a new board.

The new ANC leadership could also succeed in positive changes to the Mining Charter with Baxter saying that the chamber has been involved with high-level ANC figures about the policy document.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com