Paul Miller
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – The South African mining industry is in a state of financial decline, with many mining companies struggling to turn a profit and government stalling the amended regulation framework, according to financial services provider Nedbank Capital mining and metals investment banker Paul Miller.
He addressed key mining industry role-players at the thirty-second edition of mining networking platform the Africa Mining Network, which was held on Thursday at the Wanderers Club, in Illovo, Johannesburg.
Miller said amendments to the Mineral and Petroleum Resources Development Act and the delay in finalising the Mining Charter were resulting in uncertainties that discouraged investors and left existing mine operators with doubts about how to plan for the future.
In addition to a complex legislative environment, the South African mining sector was also being burdened with significant taxation, with as many as six streams of tax being levied on miners in various aspects of their business before mine owners had access to profits. These included taxes on things like the purchasing of equipment and paying income tax for staff.
The key to the survival of the local mining sector was finding and securing new capital, said Miller, adding that South African mine managers needed to realise that they had to compete with international miners in terms of attracting investment.
Miller suggested that what was required to achieve a turnaround in local mining business models was the implementation of a “world-class regulatory environment”, as current legislation was poorly drafted, resulting in it being difficult to understand, thereby leaving room for discrepancy.