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LEGISLATIVE ENVIRONMENT
 
South Africa requires ‘tender loving care’, says incoming Anglo American CEO
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18th March 2013
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JOHANNESBURG (miningweekly.com) – South Africa requires “tender loving care”, a proper recognition of its history and an acknowledgement of its importance, says Anglo American CEO-designate Mark Cutifani.

Cutifani, who has mined on six continents in 25 countries and in 20 commodities, was speaking at a South African Chamber of Mines (CoM) function held in his honour.

The Australian takes over as Anglo American CEO from the equally pro-South African incumbent CEO, Cynthia Carroll, on April 3.

He sees the many positive steps currently taking place as potentially creating a new starting point for South Africa, which has the world’s largest mineral resource base.

As president of the CoM, he would like to see this country credited for “the good things that are happening”.

He lists among these the decision of the National Energy Regulator of South Africa to halve Eskom’s electricity tariff increase to 8% from the requested 16%, and draws attention to the reduction from 22% to 9% of Transnet’s rail tariff application.

He discloses that promising discussions are taking place on the amendments to the Mineral and Petroleum Resources Development Act (MPRDA) and praises Minerals Minister Susan Shabangu for working “tirelessly” to turn the industry around and for taking quick action to establish a labour peace accord.

Cutifani describes the approach of Finance Minister Pravin Gordhan to mining taxation as “sensible” and says the use of local minerals to increase a country’s capacity is globally acceptable.

“The Minister’s articulation about what strategic minerals mean is the right way to describe them,” he says.

Use of the words “strategic minerals” should, he says, be articulated to mean the local use of minerals that are critical to the future industrial development of a country.

Cutifani cites the misguided statements on silicosis claims, mine nationalisation and safety stoppages as having created a sense of crisis that South Africa did not manage well.

Strikes, the Marikana tragedy, threats to licences and the wrong interpretation of the words “strategic minerals” then reinforced the negative perceptions.

“Collectively, we, as a group, were accountable for all that bad news in one form or another,” he says.

Although the JSE All-Share Index rose 60% from 2007 to January 2013, which outperformed the New York Stock Exchange, negative perceptions and 10% lower mining production destroyed value and kept the JSE All-Mining Index flat in real terms.

A positive aspect of the proposed MPRDA changes is that the industry is being given the opportunity to provide input.

“We’re in that process now and I’m confident that we’ll come out with the right outcomes,” Cutifani discloses.

The platinum industry is working through its problems collectively at a time when the mining industry the world over is asking how it can better contribute to the societies in which it operates.

On a global basis, the mining industry contributes 10% to gross domestic product directly, another 10% indirectly through its support of service industries, and it drives the world’s economy through the products it uses.

“We’re the most important industrial activity on the face of the earth, with one of the smallest environmental footprints,” Cutifani says, adding that 2013 is potentially the year in which “we turn the dial, we turn the industry to the positive and we start growing the industry again”, provided the many reforms being advocated are successfully implemented.

As AngloGold Ashanti CEO Cutifani has overseen the development of new technology that promises to allow gold to be mined safely at ultra depth, and as Anglo American CEO he promises to remain cognisant that South Africa represents nearly 50% of the diversified major’s total earnings.

Edited by: Creamer Media Reporter

 

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Mark Cutifani
 
Picture by: Duane Daws
Mark Cutifani