Mining bosses say there remains much opportunity in South Africa’s mineral wealth

GOLD mining may not be attracting the investment it once did in South Africa, but its other minerals still attract significant mining investment, delegates heard at the Joburg Indaba yesterday. Gold is a mature industry in South Africa, the opportunities are not the same as many of the other commodities in South Africa, said Gold Fieldschief executive (CEO), Chris Griffith.

Griffith was part of a panel in the Indaba which took place yesterday in Johannesburg. Other panelists included Sibanye-Stillwater CEO Neal Froneman and Impala Platinum CEO, Nico Muller.

Griffith said the opportunities to grow a company like his for safer, longer life, cheaper, lower cost more productive assets were not in South Africa, and for gold miners in South Africa, the opportunities were international. “The more productive, shallow, open pit operations are not in SA. Even with underground operations, the margins you can generate offshore are substantially higher than those in South Africa,” Griffith said.

He said Gold Fields did not diversify because it didn't trust South Africa and could not operate in the country.

“It's because the South African gold industry is mature. The massive investment being ploughed into other mining industry sectors in the country shows that South Africa is a mining-friendly enough jurisdiction,“he said.

“This is not the toughest place to work. You can generate returns here; you are protected by the judiciary, and you can get your money out. You would not believe it, living in South Africa, but relatively speaking the country has tax and fiscal stability that is quite unique in the mining industry globally,” Griffith said.

He said Gold Fields was not naive though, as there were challenges in SA. “The mining regulatory regime is not the most friendly regime out there nor is it the most stable regulatory framework out there. Then we have the problems with crime and Eskom and Transnet and the municipalities,” he said.

Froneman said 90% of Sibanye-Stillwater's business comes out of South Africa. “It's not prudent, it's not smart to have all your eggs in one basket. At the same time, there's no point in buying assets that don't help improve your carbon profile, or helps reduce or accelerate your ability to get to carbon neutrality,” he said. He said South Africa was a challenging jurisdiction.

“I've seen that South Africa can be slippery when it comes to jurisdiction, and there's a lot of sort of benchmarking, and jurisdiction-wise, it isn't the best place to work. We've got issues here that we don't gloss over. Clearly, we know how to prosper here, but I just wish it was not so difficult”.

Muller said: “I don't think that there are any short-term prospects for the company. We don't see any opportunities for us except in Zimbabwe where we see a potential,” he said. He said jurisdiction was also important. “There is a much stronger alignment in Zimbabwe with us, the government, and community is simpler. There are skills in Zimbabwe and at the same time we are a fairly sound democracy in South Africa.“

Griffith said when Gold Fields decided to acquire its mining assets in Australia it was because it was at the point when most of its production in South Africa was from solid assets. He said most people didn't understand why they went to Australia.

“Most people don't get it. We have demonstrated over time in Australia that we have more than four times the value that we have created than we paid for,” he said.