SA mining at a crossroads

Cape Town - Mining in South Africa, for long the backbone of the national economy, is at a crossroads, facing perhaps the most uncertain time in its history, with lower rates of investment and major mining houses slimming down to core businesses. 

This, says Carel Smit, of financial services network KPMG, has changed the country from a buyer’s to a seller’s market and perceptions need to be changed.

“There is no denying that a prosperous mining industry is in the best interest of everyone,” says Smit who will chair a panel of mining company chief executives at a Johannesburg Indaba on October 9.  The discussions will focus on how to satisfy the need for investment in the mining sector.

These talks among mining company chiefs, come at a time when there are several “stakeholder dialogues” also underway, attempting to build bridges, mainly between organised labour, the mining houses and government. With the long shadow cast by Marikana and the bitterness engendered by recent strikes, there are considerable hurdles to overcome.  

But there does exist a common interest in ensuring the ongoing prosperity of the sector. Between the October indaba and the various dialogues, it is hoped that a suitable plan of action can be agreed.

Government has apparently acknowledged that there is a need to provide clear and consistent policies for the industry in the years ahead. However, so far, there is still a lack of clarity and this hampers company plans and stakeholder discussions.

Among the CEOs scheduled to speak at the October indaba are Srinivasan Venkatakrishnan of AngloGold Ashanti [JSE:ANG], Neal Froneman of Sibanye Gold [JSE:SGI], Royal Bafokeng’s [JSE:RBP] Steve Phiri and Mike Schmidt of African Rainbow Minerals [JSE:ARI].

They will deal with everything from innovation and productivity to how to attract investment, create value through diversification and “give the shareholders what they want”.