Advances in SA’s mining regulatory and policy environment have been widely acknowledged. This was especially the case at this year’s Mining Indaba conference in Cape Town – as demonstrated by President Cyril Ramaphosa’s attendance of the event.
His speech to the conference delivered a message of catharsis and redemption. For instance, the “Original Sin” of colonialism – the historical theft of land – would be addressed in equal measure with prosecution of those involved in state capture.
He then took questions.
Interestingly, one was posed by none other than Anglo American CEO Mark Cutifani. It’s not often that conversations between leading business people and high-ranking politicians are given a public airing, even if this encounter was somewhat “stagey” in feel. Nevertheless, Cutifani asked Ramaphosa if “a shared vision” between labour, government and business regarding “various commodities” in specific provinces could be achieved.
In fact, the exact question ran:
“Mr President, the resolution of the Mining Charter last year sets a bedrock on which South Africa can start to rebuild its mining industry. Growth in the industry can contribute significantly to GDP growth and support the creation of jobs. To achieve this, new mines have to be significantly different from those of the past; they need to take account of deeper, lower-grade ores; new technologies; modern environmental and legal frameworks; and new ways of work.
“Would you support an initiative to create a shared vision for various commodities and mining regions in South Africa developed by industry, government, communities and labour – to bring new investment in the mining sector?”
“I’ll send a memo,” Ramaphosa replied, in jocular fashion; though it seemed clear he’d gotten the message.
The question is worth pondering, however, as it seems to move the discussion beyond the Mining Charter. Instead, Cutifani seems to be asking if SA can entirely modernise its investment case in order to accommodate all the challenges in the way of new mining investment.
Asked for clarity on what Anglo’s Cutifani had been driving at in his question to Ramaphosa, Anglo American SA deputy chairman Norman Mbazima told finweek that it was really about creating a business climate in which new mines could be built.
“Our view is that the Mining Charter was great for existing mines, but there is still some work to be done for the new mines to happen,” he said. “You can read [Cutifani’s question] in the light of that. The question is that we can talk about new mines, but it’s all in the abstract. That’s because people don’t really know.
“The next investments that are coming have to be very different, and so people must say what does that mean for, by way of example, Limpopo province? Will there be new PGM [platinum group metal] mines, or are they going to be in a different commodity? And what is needed to incentivise for that to happen? Only when we can visualise the future, can we be motivated to build new mines.”
During an interview at the Mining Indaba, finweek asked Cutifani whether the department of mineral resources had done enough for SA to compete for some $1bn in new capital Anglo allocates annually. “No,” he answered. “SA is in a substantially better place, but it is not there yet,” he said.
Mbazima said SA mining needs to start moving in the same direction as that created by French group Total’s announcement that it had found world-class resources of gas offshore near Mossel Bay in the Western Cape. The resource has become tangible but “… what is required to make it happen?”, he said.
“I would like to develop that type of feeling about the mining industry. It has to come down to being more tangible,” said Mbazima. “Do we have the institutional capacity? Well, if we have the will and authority, we can find the capacity even if it’s in the private sector; just so long as we have the authority.
“I don’t know what incentives are needed. This is still visionary thinking,” he said. “I can’t be on record to say we are going to do this, or that Anglo is going to do that, but it’s part of our thinking.
“We are big in the mining industry and we have got to be the one that continues to think through things,” Mbazima said.
This article originally appeared in the 21 February edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.