Indaba preview
Regulatory uncertainty
The main factors that keep foreign
investors away are political instability
and regulatory uncertainty. Ramaphosa’s
attempts to grow the economy is laudable,
but a fractious ANC and political rivalry
are hampering all the good intentions. In
the race to win votes, populist rhetoric
is now the flavour of the day. The South
African political landscape has become
a battlefield of ideologies, even within
the ruling party. A faction closely
linked to former President Jacob Zuma
has allegedly been plotting to topple
Ramaphosa; something that the country
can ill afford. Ramaphosa has been
pressurised to push through contentious
policy resolutions accepted at the ANC
national conference in December 2017,
when he was chosen as leader in a
neck-to-neck race with Zuma’s preferred
candidate, Nkosazana Dlamini-Zuma.
Policy proposals like expropriation of
land without compensation and the
nationalisation of the Reserve Bank
are radical interventions in a country’s
economy that does little to build
confidence among foreign investors.
Security of tenure is non-negotiable,
especially in the mining industry, which is
a long-term investment.
Mantashe’s appointment was a
welcome relief after the disastrous
tenure of the previous Minister of
Mineral Resources, Mosebenzi Zwane.
His approach to amend Zwane’s
Mining Charter III prompted applause,
which soon faded though, as its
implementation date was extended
again and again. The Mining Charter
has become a thorn in the side for both
the mining industry and Mantashe.
And still, foreign investors wait, not
sure about what Ramaphosa and his
government will do next.
In the meantime, China, usually not
as concerned about policy issues as the
rest of the world, heeded Ramaphosa’s
call, and has pledged to invest billions to
dig the South African economy out of
its hole. Ramaphosa, juggling balls and
eager to see South Africa regain some
respectability, has announced a stimulus
package and continues to garner support
from the business community. His
conundrum, though, is that he has to
retain the majority vote for the ANC
come 2019, and most of his votes will
have to be from people not as business
friendly as the president. The unions
and leftists played a critical role in
his election in December and would
expect at least some form of centralised
approach to the economic development
of South Africa — and a few political
appointments as a reward.
A challenging mining
environment
Within this political and socio-economic
timebomb, the mining industry in South
Africa has been ticking over, trying to
cut costs and grappling with its own
challenges. Deeper mines; rising input
costs; and union, labour, and productivity
Expropriation without compensation has caused a stir in South Africa,
especially in the agricultural sector being the main target of the intended new
policy amendments.
www.miningmirror.co.za
JANUARY 2019 MINING MIRROR
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