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Mining kingpins laud SA’s industry

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By Donwald Pressly.

Two powerful women at the Mining Indaba put on a show of unity yesterday and sent out signals to the investor community that South Africa’s mining industry was in reasonably good shape, but beneath the surface the tensions remained.

Mineral Resources Minister Susan Shabangu said regulatory reform had unlocked the industry’s development potential. The number of mines had jumped from 993 in 2004 to nearly 1 600 today. “Associated revenue generated grew astronomically in nominal terms from R98 billion in 2004 to R370bn by the end of 2011.

“Employment grew from just under 449 000 to 530 000 in June 2012, before it started to regress slightly in the third quarter of last year,” she boasted.

That performance was “factual and demonstrates the vibrant nature of the South African mining sector”.

Outgoing Anglo American chief executive Cynthia Carroll also focused on positive figures, saying the mining sector still directly employed more than 500 000 people and provided a further 840 000 jobs indirectly. About 13.5 million people were dependent on jobs generated by mining.

While she said the past year had been “momentous”, for the industry and for South Africa, globally the mining sector had been under severe pressure with depressed commodity prices reflecting uncertainty about short-term demand.

She remained positive about South Africa’s mining future. “I speak to you as someone who is passionate. Passionate about Anglo American, passionate about our industry… and passionate about South Africa.”

South Africa had achieved significant miracles and put in place a foundation of democracy. This included a free and fair electoral system, a “bedrock” constitution, an independent judiciary, a free press with the power to challenge abuse, an economy founded on free enterprise “and an inclusive society with the courage and grace to heal the scars of the past”.

However, in reference to the Marikana tragedy and ongoing strikes, she warned that law and order, industrial stability, economic viability and regulatory stability were “all essential if we are to make progress”.

Carroll warned that Anglo American Platinum (Amplats) would have to forge ahead with restructuring, although she hoped that “at least as many” new jobs would replace the 14 000 possible retrenchments.

Asked at a media briefing if she did not regret her threat to review the Amplats mining licence, Shabangu said the matter was “not controversial”.

The minister believed that there would be a positive outcome to talks between the government and the company. “We need to find lasting solutions.”

She said South Africa was an investment destination of choice because it had “a good regulatory framework… our financial systems are strong, there is stability”.

With regard to deaths at Marikana, she did not believe it could happen again. “We learn through mistakes,” she said.

Pressed on her view of the planned splitting by many companies of their South African and foreign assets and whether this sent a signal of mistrust, Shabangu referred the question to deputy director-general of mineral policy and promotion Mosa Mabuza.

“We have been hearing that Gold Fields has stated its intention to ring-fence its South African assets. We have not heard that Anglo American is moving in that direction,” Mabuza said.

DA mining spokesman James Lorimer said: “Minister Shabangu has done a good job of pretending everything is hunky-dory. Job losses, wildcat strikes, violence, decreased demand and government bullying are the key ingredients missing from the minister’s assessment.” – With additional reporting by Dineo Faku

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