Mantashe ‘holds key to recovery’

A recovery in the mining sector hinged on Mineral Resources Minister Gwede Mantashe’s ability to bring about policy clarity, analysts said on Thursday.

After a lacklustre performance in the fourth quarter of 2017, the sector staged a marked recovery in January, with production rising 2.4%, according to figures released by Statistics SA on Thursday.

It also revised December’s figure from growth of 0.1% to a contraction of 0.5%.

With Mantashe there is renewed optimism that the policy impasse in the mining industry could be tackled. This could unlock much-needed investment in the sector, said NKC economist Elize Kruger.

She said the synchronised global economic recovery was expected to remain supportive of the sector. A weaker US dollar would probably help to maintain commodity prices at fairly high levels in 2018.

But Mantashe’s success in undoing policy bottlenecks, which continued to crimp investment and activity in the sector, would be key to its growth in 2018, BNP Paribas economist Jeffrey Schultz said.

Policy and regulatory uncertainty, specifically about the redrafted Mining Charter, had affected much-needed investment in the sector, said Investec economist Lara Hodes.

The Chamber of Mines, which represents 90% of SA’s mining companies, welcomed the appointment of Mantashe, calling him a man of integrity and dignity. This is a stark contrast to the public animosity that existed between the mining body and Mosebenzi Zwane, Mantashe’s predecessor.

Zwane and the chamber became embroiled in a court battle over the reviewed Mining Charter in 2017, which led to a breakdown in their relationship.

On Wednesday, President Cyril Ramaphosa said in Parliament that a new Mining Charter would be drafted within the next three months, after the Chamber of Mines in February agreed to halt its court challenge against the reviewed charter.

“The mining industry needs to be attractive to investors through a Mining Charter that offers certainty, stability and has a clear transformational path,” he said.

Chamber of Mines president Mxolisi Mgojo welcomed the government’s willingness to engage with industry stakeholders on the charter.