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It’s time for predictability, consistency, integrity with an end to policy somersaulting

27th May 2016

By: Martin Creamer

Creamer Media Editor

  

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The South African mining industry is now significantly smaller than it was in 1994. Mining Ministers have come and gone. As one Minister becomes familiar with the territory, another comes in cold and begins afresh. Each has promised predictability and consistency, but none has delivered any.

The director-general (DG) of the Department of Minerals left his post months ago and his position has not yet been filled.

Mined output has fallen so fast that South Africa has gone from hero to zero in gold production.

Platinum mining has been so badly battered that executive departure is quickening.

Mining legislation has been in limbo for so long that the country is learning to live without it.

There is negligible exploration and no incentives for junior miners to emerge and catalyse expansion.

The movement of JSE-listed companies across the continent of Africa has not kept up with companies listed in Toronto and Sydney, which then take up the skills developed and paid for by South Africans.

Five years ago, a former departmental DG publicly admitted to deliberately holding back mineral right applications for prolonged periods under the guise of incompetence, but in reality to direct them to selected targets.

Although all documents were ready for the Minister to sign, they were locked in a safe to force change, which has backfired badly for the South African economy.

One of the huge companies disadvantaged was even prepared to create highly significant urban development around its operations, but denial of additional mining rights put an end to what were highly capital-intensive plans.

The new investors, for whom the door had been held open, have, at best, only been able to make meagre contributions to the South African economy.

As that think-tank, the Brenthurst Foundation, stated in its recent Zambezi Protocol dialogue on natural resource policy in Africa, investor credibility is anchored on predictability and consistency.

If somersaulting ensues, investor confidence is destroyed, econo- mies shrink and the triple evils of unemployment, inequality and poverty will worsen.

Failure to adopt consistent mining policy is not, as Brenthurst points out, because there is a lack of publicity around best and worst practice.

The best is there for all to see and so is the worst and anyone who opts for the worst sabotages their economy unnecessarily.

Read on page 9 of this edition of Mining Weekly how new Tanzanian President John Magufuli is quickly restoring investor confidence in the East African country. To watch a video in which Montero CEO Tony Harwood talks about making South African mining great again, scan the barcode on page 9 with your phone’s QR reader, or go to Video Reports on www.miningweekly.com.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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