Miners head to SA, but leave cheque books at home

Cape Town - With its iconic mountain, beaches and vineyards, it’s easy to attract global mining bosses and fund managers to Cape Town. Yet as thousands of executives, shareholders and officials flock to South Africa for the annual Mining Indaba, the industry’s investments are flowing the opposite way.

A mix of shrinking reserves, rising labour costs, frequent stoppages and regulatory uncertainty has prompted major miners to rethink their presence in the country, home to the world’s largest platinum, chrome and manganese reserves and the source of one-third of all gold ever mined.

Anglo American [JSE:AGL], once a keystone of the economy, is selling half its assets in the country, while BHP Billiton [JSE:BIL] and Gold Fields [JSE:GFI] both spun off their local operations in the past four years. AngloGold Ashanti [JSE:ANG] tried to do the same. South Africa, which was the world’s largest gold producer for a century until 2007, has now dropped to sixth place.