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Johannesburg - Mining expert Peter Leon believes South Africa’s mining sector could have a prosperous future ahead of it, now that the changing of the guard has taken place.
In his speech to the British Chamber of Business in South Africa last week‚ Leon said South Africa’s new leader President Cyril Ramaphosa brought new hope to an industry that has been uncertain about its journey forward.
“The positive and decisive steps taken in the two months since Ramaphosa was elected ANC president, when contrasted with the regulatory entropy of the Zuma administration, inspire some optimism that South Africa’s mining industry does indeed have a future.”
He was addressing the chamber before Ramaphosa delivered his maiden State of the Nation Address on Friday evening.
Leon said Ramaphosa would hopefully once more set South Africa on a sustainable trajectory of economic growth, in which the mining sector – one of the country’s oldest and largest industries – is destined to play a significant part.
Ramaphosa played a key role in the National Development Plan (NDP)‚ which Leon believes offers a sober assessment of the shortcomings in the South African mining industry and could recommit the country to the plan that will help build a better mining future if implemented.
Leon said that since his election in December, Ramaphosa has made a concerted effort to lure foreign investors back to South Africa. He was sworn in as SA president on Thursday, and delivered his SONA on Friday.
Welcoming investment
He said that under Ramaphosa’s leadership - in contrast to its statist vision in 2012 - the ANC stated that its vision is an economy that encourages and welcomes investment, offers policy certainty and addresses barriers that inhibit growth and social inclusion.
Indeed, in contrast to its 2012 predecessor, the ANC’s official policy on the mining sector is now that the ruling party should prioritise the implementation of the NDP’s key proposals for minerals and metals, Leon noted.
This includes ensuring that minerals legislation provides a predictable, stable, competitive and certain regulatory environment for increased mining activity and investment, deepening linkages between mining and other sectors of the economy and undertaking research and development to find methods to lengthen mine life and use energy and water resources more efficiently.
Leon was, however, scathing about the bill to amend the Mineral and Petroleum Resources Development Act as well as the controversial Mining Charter, saying they worsened regulatory uncertainty. Ramaphosa would have to tackle both to chart a path forward.
“It is noteworthy that this statement eschews any mention of the embattled bill or charter, which the ANC had previously insisted should be 'expedited', in almost every policy statement it made on mining between 2013 and 2016,” Leon said.
“From a policy perspective, this should clear the way for both the bill and the third Mining Charter to be withdrawn, and for the path of regulatory certainty to be laid.”
In his address Friday, Ramaphosa said he would “intensify engagements with all stakeholders” around the controversial charter, saying that he wished to see a "genuine partnership, underscored by trust and a shared vision" between the state, labour and mining companies.
He did not, however, indicate whether he would like to see the charter scraped or amended in any way.
Break the deadlock
Leon said that even before his election, Ramaphosa remarked that South Africa must urgently break the ongoing deadlock on the regulation and transformation of the mining sector to ensure the proper use of South Africa’s world class mineral resources.
“The Mining Charter is now going to be thoroughly discussed with key role players so that we find a solution to unlock our mining industry for South Africa to benefit from the boom,” he said, adding that if the charter is holding the country back it should be dealt with urgently.
Additionally, Ramaphosa regards as urgent the restoration of good governance at all state departments and state-owned companies, whose networks and services he sees as crucial investment enablers; Leon called the removal of Eskom’s board “encouraging”.
Ramaphosa's reported refusal to offer Jacob Zuma any amnesty from prosecution in order to persuade him to hand over the keys to the Union Buildings signals an important commitment to constitutionalism and the rule of law, Leon stated.
The Chamber of Mines, meanwhile, on Saturday called Ramaphosa's maiden SONA "visionary", saying it demonstrated a "clear commitment to ethical leadership and to putting South Africa first".
'We particularly welcome the President’s commitment to a new phase of engagement with stakeholders in the industry – and others – on a New Mining Charter," it said. "Ultimately a New Mining Charter must be developed and resolved through negotiation, with representation by a broad range of stakeholders – government, business, labour and communities."
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