Finweek English Edition - - Openers - DAVID MCKAY

REAL MIN­ING fixed in­vest­ment in South Africa grew 5,9% in the first three quar­ters of last year. The rea­son that’s note­wor­thy re­lates to a sur­vey pro­duced by the Cham­ber of Mines of SA in Novem­ber 2006 that re­ported in­vest­ments of be­tween R5bn and R10bn had been de­ferred in SA’s min­ing in­dus­try ow­ing to poor in­fra­struc­ture and new min­ing laws.

In the po­lit­i­cally charged en­vi­ron­ment of SA’s re­sources sec­tor, meet­ings be­tween the cham­ber and the Min­er­als & En­ergy De­part­ment (DME) were ur­gently con­vened and it was de­cided to com­mis­sion a dif­fer­ent kind of in­ves­ti­ga­tion into why in­vest­ment in SA’s min­ing in­dus­try lagged world av­er­ages.

That in­ves­ti­ga­tion con­tin­ues. How­ever, Roger Bax­ter, the cham­ber’s se­nior econ­o­mist, says the fixed in­vest­ment fig­ure is promis­ing. “There was a 20% de­cline in 2004 and a fur­ther 13% de­cline in 2005. The 2006 fig­ures aren’t in­clu­sive of the last quar­ter of the year – but it’s pos­i­tive.”

Bax­ter goes so far as to sug­gest that Gov­ern­ment’s new min­ing laws are be­ing im­ple­mented with more ur­gency – a fea­ture re­flected in the DME’s de­ci­sion to up­date the grant­ing of min­ing li­cences on a monthly ba­sis.

Grum­bling by min­ing com­pa­nies con­tin­ues – most re­cently by ex­plo­ration ju­nior Mi­randa Hold­ings – that per­mits are tak­ing more time than they should.

But the DME’s latest pub­lished fig­ures in­di­cate a def­i­nite ac­cel­er­a­tion in per­mits granted. Those are li­cences en­abling min­ing com­pa­nies to prospect for new land or to con­tinue min­ing ex­ist­ing land (a new or­der min­ing li­cence con­ver­sion). Min­ing com­pa­nies can’t have such li­cences granted un­less they meet, or show they can meet, cer­tain em­pow­er­ment, en­vi­ron­men­tal and so­cial tar­gets.

The monthly fig­ures re­ported by the DME show that of all ap­pli­ca­tions for prospect­ing li­cences be­tween May 2004 and June 2006 – 5 242 in to­tal – ap­prox­i­mately 94% have been pro­cessed. That doesn’t mean they were all granted, but the bu­reau­cratic back­log is be­ing tack­led.

How­ever, there re­mains much work to do. Just con­cern­ing prospect­ing ap­pli­ca­tions alone, there have been 965 fil­ings be­tween July and De­cem­ber 2006, re­flect­ing per­haps the be­lated im­prove­ment in SA’s ex­plo­ration in­dus­try. Ac­cord­ing to the DME’s self-im­posed dead­line, those must be pro­cessed in six months.

Fixed in­vest­ment fig­ure is promis­ing.

Roger Bax­ter

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