Get nationalisation issue out of way, says migrating chamber strategist

JOHANNESBURG (miningwekly.com) – South Africa needs to get the issue of mine nationalisation out of the way because it is not helping anyone, says departing Chamber of Mines strategy executive, Roger Baxter, 45, who is leaving South Africa to work in Canada.

Instead of using the word ‘nationalisation’, South Africa should be discussing how the mining sector can contribute more meaningfully to the country’s economy, adds Baxter who formerly devised strategies to counteract the negative forces that have descended upon South Africa’s mining sector.

His unexpected departure, after nearly two decades of service, takes place ahead of the official debate of the ruling African National Congress on the issue of mine nationalisation, which Baxter has warned will set South Africa back 30 years and not solve the country’s unemployment problem.

Baxter was speaking to Mining Weekly Online as he and his family prepare to depart South Africa to allow him to take up a top position in Montreal as VP industrial strategy at Alcan, the Rio Tinto aluminium company.

Baxter’s contention is that the South African mining sector could add another 100 000 direct jobs in the next ten years, accompanied by a further 100 000 indirect and induced jobs, if given security of tenure and a predictable business environment.

While the Presidency, the Department of Economic Development, the Department of Trade and Industry and the National Treasury recognise that mining has a particularly important role to play as one of the tradable export sectors, Baxter says that the question of how South Africa’s infrastructural issues will be resolved remains unanswered.

“What concerns me is that we keep on pushing on the same piece of string and keep on getting the same outcome, which is not necessarily optimal for the mining industry,” he comments to Mining Weekly Online.

His view is that government needs to cross the Rubicon of private-sector participation in energy and rail infrastructure.

“Get the private sector involved. The private sector can help to revolve the constraints.”

He is not talking about privatisation but about independent power producers being able to sell their electricity into the national grid, supplementing supply and enabling the mining sector to have extra electricity for growth and about the concessioning of some of the railway lines to the private sector.

“There are wonderful opportunities that exist for us to undo the constraints,” he says, he adds that this will require collaboration between government, business and labour to avoid missing out on the next commodities boom as the country did during the last one.

Most of the issues that are holding South Africa back are domestic in nature and not international issues.

“The rest of the world wants iron-ore, gold and platinum. We need to deal with the things that are holding us back,” says Baxter.

He is leaving at a crucial time, given his role in the chamber’s tripartite initiative with government and labour in the reshaping of the mining sector’s legislative backbone, the Mineral and Petroleum Resources Development Act (MPRDA).

The amended MPRDA should, in his view, replace excessive discretion with guided discretion.