Sentiment from the Hogan Lovells Africa Forum, held in September, in Sandton, in Johannesburg, culminated in a call for mining policy change, and especially policy that affects the South African mining industry. The event was hosted by law firm Hogan Lovells.
A panel of capital-raising and mining experts discussed whether South Africa was becoming, or already is, uninvestable.
Cadiz Corporate Solutions mining director Peter Major said that, although South Africa had “half the world’s minerals”, there was “nobody to mine them” – a situation that was evident in the as many as 6 150 abandoned mines. “South African mining has gone from having the most advanced, efficient mines on the planet to the most destroyed industry.”
He added that, although it was difficult to determine which “blueprint” the Department of Mineral Resources (DMR) was using to regulate and govern the local mineral endowment, the industry absolutely and definitively needed a completely new blueprint to slow the rapid decay of industry and decreasing investor confidence.
Major explained that the most important rule in the investment arena was not to pour money into a prospect that would almost inevitably lose money, referring to the South African mining sector as being highly risky.
The increasing risk of investing in South African mining projects (especially exploration and junior projects) was, moreover, induced by policy uncertainty – rules and regulations imposed by the DMR.
“The Democratic Republic of Congo destroyed its mining industry, but it was subsequently resurrected. “How? Through policy change!” Major emphasised.
Zambia’s mining industry was also resurrected through a change in mining policy, while Chile instituted two policy changes that transformed its mining sector to high investability status, attractive for explorers, investors and miners in general, he elaborated.
“Policy change is all South Africa requires, otherwise the industry is doomed. The right policies attract investment,” said Major.