Expect a more upbeat mood at Mining Indaba
The mining industry is set to recover due to sweeping political changes in the country and the continent
Drumming up investor interest in Southern Africa’s mining industry has been a tough sell in recent years. But what a difference a few weeks can make.
Cyril Ramaphosa’s election as new head of the ANC, coupled with Robert Mugabe’s ouster as president of Zimbabwe, has given mining companies a teasing sense that some of the regulatory and political uncertainties strangling investment may soon clear.
Add to that a resurgence in commodity prices, and things are looking rosier than they have in years. SA’S mining investment drought has been largely selfinflicted and therefore entirely avoidable.
Figures from the SA Chamber of Mines show fixed investment in mining has been flatlining for five years, and negative for the past two years.
Just a few months ago, mining analysts and fund managers had written SA off as a viable destination for mining investment due to onerous new BEE codes that would require companies to increase black ownership of assets to 30% from the current 26%.
The proposed new rules would also require companies to pay 1% of revenue towards community development, while directing more procurement spending to blackowned companies.
The Chamber of Mines is fighting the new mining charter in court, arguing that mining minister Mosebenzi Zwane was not entitled to make the changes he did.
While the court case proceeds, the political changes both north and south of the Limpopo have imbued the mining sector with optimism.
This helps explain why the 2018 Mining Indaba in Cape Town, taking place on 5-8 February, is expected to break previous attendance records.
A total of 37 government ministers, 28 of them from Africa, have confirmed they will be attending.
“This year we will be hosting 12 roundtable discussions with the mining leaders of 20 African states and 40 mining companies,” says Mining Indaba CEO Alex Grose.
“We will also be hosting a closed-door ministerial symposium, bound by Chatham House rules [information revealed in the meeting can be disclosed, but not the identities of the speakers], which will allow ministers from different countries to talk openly with CEOS from the mining sector about real challenges and how to move things forward. This is an opportunity for ministers to engage with each other and with business leaders in finance and mining.”
These discussions will focus on the major issues affecting the development of the mining sector and come up with collaborative action plans to overcome these challenges, says Grose.
“The indaba is the only event on the African continent that engages the most prominent mining CEOS, African mining ministers and the major industry organisations and bodies such as the World Bank, UN Economic Commission for Africa, SA Chamber of Mines and the African Development Bank.”
Issues to be discussed include how to strengthen intersectoral linkages that would add more value to extracted resources, governance and perceived regulatory gaps across the continent, and encouraging mining investment and support from the financial sector.
Cadiz director of mining Peter Major, one of the speakers at the event, sees a noticeable change in mood ahead of this year’s meeting.
“We’ve been through seven horrible years in mining. This year, things are looking decidedly better, largely because of the changing political landscape. In Africa, governments go out of their way to
What it means: A more business-friendly policy is set to rescue the ailing industry — without much fanfare