Fmdr-Zambia May/June 2016 Jan/Feb edition 2017 | Page 8

MINING NEWS

Governments urged to cra� tting policies

for mining industry

Poorly thought-out mining policies are impacting Africa ' s mining sector, the annual mining jamboree Mining Indaba in Cape Town, South Africa has heard. Sharing the same sentiments, stakeholders said uncertainty and inconsistency are hampering the search for new mining investment on the continent. In addition, the policies have cast a shadow over the continent ' s longer-term economic growth. �e world ' s largest mining investment conference highlighted a subdued investor mood in mineral-rich South Africa, Africa ' s largest mining destination“ Amid signs that the commodity cycle may be turning, South Africa will not be positioned to take advantage of the green shoots of spring, or the heat of summer, unless the environment for mining is conducive to private-sector investment. And the [ South African Mineral Resources ] minister ' s bland speech was frighteningly short of any sign that he had understood investors ' concerns about the regulatory environment for mining – or that he had intentions of doing anything about these concerns,” noted Johannesburg nancial newspaper, Business Day, during the Mining Indaba. �e publication further said there are other much easier and more attractive destinations for mining investment, by junior or senior miners, and international investors are increasingly passing South Africa by. Meanwhile Botswana still shines as a model mining-investor destination by international standards. However, the serious investor concerns are not limited to South Africa but virtually all African mining destinations – Zambia, Ghana, Guinea, Tanzania and the Democratic Republic of Congo( DRC). To a large extent, these concerns stem from sudden and unexpected changes made by many mineral-dependent African countries to their mining regimes a�er the 2008-09 global nancial crisis. Hit by the twin hammers of lower revenue and rising debt, countries attempted to extract more money from their mining sectors at a time when they could least afford it.“ Many African countries made rash and unpredictable changes to their mining regimes, creating regulatory uncertainty and harming investor con dence,” said Peter Leon, a partner at the global legal practice Herbert Smith Freehills. Ghana, for example, announced in 2012 that it would impose a 10 % windfall tax on gold mining and review its scal stability agreements with foreign mining companies, but failed to follow through on these measures. �en in 2014, Ghana amended its mining law to replace the xed 5 % royalty with ' wide executive discretion ' to prescribe new rates. �e resulting regulatory uncertainty ' weighed on sentiment ', and considerably affected Ghana ' s ranking in the authoritative Fraser Institute ' s annual review of the investor attractiveness of the world ' s mining destinations.“ Ghana fell from its enviable 2011 ranking of 17th in the world to 38th in 2012, and then uctuated from 30th in 2013 to 44th in 2014 and 31st in 2015,” said Leon. Another notable example is the DRC, Africa ' s largest copper producer, the world ' s largest cobalt producer and a major source of diamonds, gold, tantalum and tin. While the country ' s 2002 mining code“ strikes a
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