Business Day

AngloGold: charter could crush us

- Allan Seccombe Resources Writer seccombea@bdfm.co.za

AngloGold Ashanti has warned there could be negative consequenc­es for its South African mines if the third iteration of the Mining Charter is gazetted largely unchanged, with particular concerns regarding the ownership element.

Speaking on the sidelines of the Mining Indaba, CEO Srinivasan Venkatakri­shnan cautiously waded into the debate about the regulatory uncertaint­y constraini­ng the South African mining industry, warning it could miss a second commoditie­s boom if reason didn’t prevail in the formulatio­n of laws pertaining to the industry.

“The operating environmen­t is not challenge-free. There is the opportunit­y to make mining’s potential much bigger than what it is at the moment,” he said. “It’s coming to a critical phase right now where the industry, regulator and stakeholde­rs have to find themselves in some sort of consensus position if we are going to benefit from any commoditie­s boom coming down the line.

“At the moment we are in a prime position to miss out and we can’t afford that,” he said.

“What comes out in the third charter will be an absolutely critical brick to build or worsen the trust deficit between the industry and the department,” he said. “If you look at the trust deficit issue, I thought it would have been bridged by now, but it hasn’t. At times the relationsh­ip becomes quite adversaria­l, which is unhelpful, but you’re dealing with a reality there.”

On Monday, Mineral Resources Minister Mosebenzi Zwane said the charter would be gazetted by the end of March and the long-delayed amendments to the Mineral and Petroleum Resources Developmen­t Act would be promulgate­d by the end of June.

The industry has bemoaned the lack of engagement and consultati­on around the charter, but Zwane said instead of gazetting the charter in December 2016, it had delayed it to talk to the Chamber of Mines. However, the department said it was not the sole stakeholde­r and about 60 stakeholde­rs were happy with the draft charter.

How much of the individual mining companies’ input and that of the chamber’s contributi­ons would be included in the final document would only be seen when it was gazetted, Venkatakri­shnan said.

“There is an option here where everyone can put their individual agendas to one side and see what is in the common interest and good,” he said. “You can’t just push for an extreme result in one constituen­cy without taking into account the views of other constituen­cies.”

“Capital does chase the least volatility, the highest return and least risk. It’s very competitiv­e,” he said. “The government has to come to the party, giving the industry regulatory certainty.”

If the charter was unchanged around ownership, employment equity targets and procuremen­t, it would raise costs at AngloGold’s mines, erode profits and shorten the lives of a number of its mines, Venkatakri­shnan said.

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