Jury still out on Mining Charter's ability to lure investment, says former Exxaro boss | Fin24
 
  • State of the Nation Address

    The crisis at Eskom will feature in the president's address, says his economic adviser.

  • Dudu Myeni

    A former SAA executive says the airline's ex-chair asked staff to 'do illegal things'.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.

Loading...

Jury still out on Mining Charter's ability to lure investment, says former Exxaro boss

Oct 04 2018 06:15
Sibongile Khumalo

The finalisation of the Mining Charter may help bring policy certainty to the mining sector, but questions remain around whether the legislation can translate into increased investor confidence and competitiveness, according to former Exxaro Resources CEO Sipho Nkosi.

Nkosi, now the non-executive chairperson of investment holdings company Talent10, said South Africa should learn from major mining countries like Australia and Canada when it comes to attracting investment.

“The signing of the Mining Charter did well in providing certainly, now were know what to expect for the ten years,” he Wednesday on the sidelines of The Joburg Indaba, a two-day conference that brings together mining bosses, government officials and investors. “There is still a question on whether the charter will translate into improved investment into the sector and increase competitiveness."

The reviewed Mining Charter, gazetted last week, sets out regulations aimed at transformation the mining sector, including a requirement that new licence holders must have a minimum of 30% BEE shareholding.

“The key thing - now that the document is there - is will it bring investment to the country?” he asked. “We still have to do a lot of work in terms of studying what countries such as Australia and Canada are doing right in terms of attracting investment."

The third version of the charter was initially introduced by Mineral Resources Minister Gwede Mantashe’s predecessor Mosebenzi Zwane. In 2017 it came in for strong criticism from mining employers organisation the Chamber of Mines - now the Minerals Council South Africa - which argued that some of its provisions were not easy to implement and others unconstitutional.

Mantashe renegotiated parts of the charter after he replaced Zwane in late February 2018.  

Nkosi said on Wednesday that the legislation had not produced any outright winners due to numerous concession made during consultations. Factors such as the high cost of doing business in South Africa and the threats presented by the land expropriation debate were still a major source of discomfort for investors, he said.

The president of the Minerals Council Mxolisi Mgojo told delegates at the conference that the body supports “the intentions and content” of the revised charter but plans to engage Mantashe on some of sticking points.

“The critical issue, however, is whether the charter strikes a balance in the national interest that will not discourage the much-needed capital investment while effectively promoting transformation,” said Mgojo.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...