Will Ramaphosa be mining’s cure-all?
• Already there’s a sense of renewed hope following Cyril Ramaphosa’s election as the new president of the ANC, writes Johann Barnard
Deputy President Cyril Ramaphosa stole the march on organisers of the Investing in African Mining Indaba by using the World Economic Forum (WEF) in Davos to offer some hope to the mining industry. While the event in Cape Town would have provided the perfect platform to reassure an increasingly alienated industry, WEF’s global audience two weeks prior to the indaba was too tempting to ignore.
“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 SA to benefit from this boom,” Ramaphosa said at a media briefing in Davos. “If the Mining Charter is holding us back, then we must deal with it.”
This stance is galaxies away from the environment created over the past few years by the Department of Mineral Resources that has alienated miners and bodies like the Chamber of Mines.
This battle is well documented, and resulted in the chamber taking to the courts to resolve the impasse.
Dissatisfaction over the manner and content of the revised Mining Charter and proposed changes to the Mineral and Petroleum Resources Development Act have all but halted investment in a key driver of economic growth, exports and jobs.
This slowdown in investment is reflected in the broader economic malaise impacting the country. According to numbers published by UN trade and development agency UNCTAD, foreign direct investment in 2017 was measured at $3.2bn. This was up from $2.3bn inflows in 2016 and outflows of $3.4bn, but significantly down from 10 years previously when SA recorded average FDI inflows of $4.5bn and outflows of $3.3bn.
Although Business Day spoke to mining companies and commentators before Ramaphosa’s Davos comments, there was already a sense of renewed hope after his victory at the ANC’s elective conference in December.
“We have a good feeling and we respect Cyril, and we will work together with him,” said Neal Froneman, CEO of Sibanye-Stillwater. “He has identified the mining industry as a key component of his economic plan and that is a great first step in recognising the role that industry can play and wants to play.
“As long as he continues down that path, we would certainly be very supportive and change our view on investment. But I would say we need to see the regulatory environment change. We need finality on the Mining Charter.”
The industry’s insistence on a more conciliatory approach from government is understandable, particularly the manner in which Minster Mosebenzi Zwane has ridden roughshod over efforts to engage in dialogue.
As a consequence, few tears will be shed if the minister is removed from his post. This appears increasingly likely following investigations by the National Prosecuting Authority into the Gupta-linked Vrede dairy farm debacle. Zwane was MEC for agriculture in the Free State when the influential business family are alleged to have defrauded the public of money meant to develop the dairy project.
Ramaphosa’s comments regarding a new stance are therefore more than welcome in an increasingly toxic environment.
“The election of Ramaphosa as president of the ANC has already led to a renewed hope,” Claude Baissac, MD of consultancy Eunomix, said prior to the Davos meeting. “That’s well timed because it corresponds to the Mining Indaba and I do expect it will lead to optimism and I expect we’ll see goodwill on behalf of the investment community.
“But it’s goodwill, and the jury is still out. I do think there are significant questions the ANC needs to answer in relation what is going to happen to Jacob Zuma. The division in the National Executive Committee is problematic.
“I think the future of the government still needs to be fought, and won. Clearly, something significant has happened. I think what would be very good is for the minister to be replaced. That would really signify that changes are coming, but let’s not put artificial deadlines on policies and moves that are critical and might take a little time.”
That time frame might well be accelerated. And on evidence of the speed at which the ANC leader has clamped down on Zuma allies who had been untouchable no-one should be surprised if Zwane is removed in the lead-up to this year’s Mining Indaba.
What better way to show Ramaphosa is serious about reforms and heralding a new era that lays the foundation for the future prosperity of the industry and SA?
I WOULD SAY WE NEED TO SEE THE REGULATORY ENVIRONMENT CHANGE. WE NEED FINALITY ON THE MINING CHARTER