Indaba preview
The platinum
industry has
really been in the
doldrums for at least
the last eight to nine
years. The reality is
that it is very difficult
for platinum mines
to run profitable
operations at current
market prices.
concerns, have plagued a once thriving
sector of the economy. Last year’s safety
record has been appalling, and Mantashe
has been quick to rebuke mining
bosses for chasing profits rather than
considering safety.
Although all is not lost for South
Africa, questions remain, and the
Charter and expropriation of land
without compensation dominate the
national discourse.
According to Gary Felthun, partner
at law firm White & Case and head of
Mergers and Acquisitions (M & A),
there has been a notable drop in the
number of mergers and acquisitions in
the past four years. “There is no doubt
that legislative uncertainty plays a major
role,” says Felthun. “But we cannot
only blame politics and regulations for
the mining industry’s woes,” he adds.
“The platinum industry has really been
in the doldrums for at least the last
eight to nine years. The reality is that
it is very difficult for platinum mines
to run profitable operations at current
market prices,” he says. South Africa
is heavily dependent on platinum
production and produces the majority
of the world’s platinum. To make things
worse, large new projects like Ivanhoe’s
Platreef Mine, and several new mines in
Zimbabwe, will push additional stock
into the market, potentially increasing
the supply and demand gap.
Felthun says margins do not appear
to be great in the gold mining sector
either. “We haven’t seen a lot of foreign
investment in gold or platinum, which
is a concern. It is therefore imperative
that mining is made more attractive for
foreign investors,” says Felthun.
Attracting more foreign
investment
“The Mining Charter is a critical
component of mining in South Africa. It
is important that decision-makers make
The South African underground mining environment is becoming increasingly
dangerous, and last year the safety record has been atrocious.
[16] MINING MIRROR JANUARY 2019
www.miningmirror.co.za