This promise can’t be made
SO, LAST week Tony Poli, executive chairman of a Sydney-listed mining company, Aquila, was telling a press conference in Johannesburg what a pleasant experience investing in SA had been.
Sure, there was a problem where the Department of Mineral Resources had granted a prospecting right to a company jointly owned by the South African, Zimbabwean and Zambian governments on land already being mined (for manganese) by an Aquila company.
Mr Poli was confident last week that the matter could be sorted out in negotiations, and so he went off to see Mineral Resources Minister Susan Shabangu.
However, on Monday, Aquila issued a statement saying it was now “unlikely” to be resolved by further discussions. Aquila then announced it was thinking about taking the department and the minister to court over the issue.
This is not the first time — and neither will it be the last — that the department has granted a prospecting right over existing mineral rights. Its seems to be to provoke a dispute which is then “resolved’ by it intervening between “prospector” and the pre-existing miner to look for a “solution”. We will wager that Aquila is offered an opportunity to form a joint venture with the so-called prospectors.
Thus is another nail driven in to SA’s reputation as a safe investment destination. Safe?
“Is my investment safe from arbitrary political decisions when I buy in SA?” does not seem to be an unreasonable question for an investor to ask the government. Ms Shabangu spends a lot of her time jetting around the world reassuring investors that it is.
But she is not telling the truth. In Parliament now, amendments to mining legislation are being made specifically to allow the minister to make arbitrary decisions over mining rights. And the changes, passionately opposed by the mining industry, are being stoutly defended by the government and ANC MPs.
It is breathtaking stuff. Ministers seem still utterly unaware of where the money that their departments spend comes from. It would be impossible for a prudent state to be so neglectful of the contributions of private businesses making private investments, so deaf to their needs if it truly understood the monumental train-wreck it is making out of Investment Destination SA.