Despite attempts by the South African government to appease foreign investors there are still concerns about the future of mining in South Africa, writes Leon Louw.
‘Optimistic’ is how Minister of Mineral Resources Gwede Mantashe described the government’s outlook for the South African mining industry on the first day of the 25th Investing in African Mining Indaba in Cape Town, South Africa.
Although a large part of the delegates packed into the main stage of the Cape Town International Convention Centre (ICC) shared most of Mantashe’s sentiments, there were still niggling questions about the future of a once thriving industry. Mantashe has been a boon for mining in South Africa, but his encouraging words fell short of placating fidgety investors. One speech at a global event doesn’t give foreign capital enough comfort to make long term commitments. Apart from being compromised (but not yet found guilty) by allegations made at the Zondo commission of inquiry into state capture, the Xolobeni fiasco in the Eastern Cape has put a once swaggering Mantashe slightly on the back foot.
If he didn’t mention the promising Springbok Flats as a possible new coal mining region or that new geological mapping has proven up significant gold resources, his address would have been dreary. Yet, Mantashe has started to rebuild an industry decimated by years of political interference, inconsistent regulations and incompetence in government departments. However, no matter how hard the minister tries, foreign investors are still shell-shocked after Jacob Zuma’s decade of pillage and will remain so until the government instils confidence and leads from the front. This means, among others, acting on the Judge Zondo’s recommendations and bringing to book those responsible for looting state coffers, which, of course, includes Jacob Zuma.
Even though both Mantashe and President Cyril Ramaphosa have mining in their blood, the path to South Africa’s economic and political future – and mining’s role within it – remains unclear. The Zuma faction in the ruling ANC continues to undo all the good done by a clearly more foreign investor friendly Ramaphosa, Mantashe and Mboweni. To strengthen his position within the ANC, Ramaphosa has to ensure that the ruling party wins at least 60% of the vote in the national elections in May – a big ask after the recent revelations at the Zondo commission. If the ANC loses votes and performs worse at the polls than in previous elections, Ramaphosa (and the mining industry) is in trouble.
Mantashe may not have inspired a large number of delegates with his key-note address at the Mining Indaba, but he has mended the rift between government, the private sector, labour and communities. Ramaphosa has praised him on numerous occasions, and the mining industry has embraced his tough talk and robust discussions.
Gwede Mantashe may not be the most comfortable in a suit sitting behind a microphone on main stage, but he knows about mining and he might just be the South African mining industry’s last great hope. In the silly season before elections, Ramaphosa and Mantashe need to come clean and prove their detractors wrong. If they do, South Africa, and the mining industry, will be back on the global mining map.