Ramaphosa could play a key role in reviving mining industry: IRR
Newly elected ANC president Cyril Ramaphosa has a key role to play in replacing the present hostile environment in mining with policies that welcome and encourage the industry.
This is contained in a report from the Institute of Race Relations (IRR).
The report is a survey of mining’s critical role in the economy and in the lives of people‚ both in mining communities and far beyond them.
It cautions that without an absolutely fundamental improvement in the policy environment‚ mining will continue its slow decline‚ attracting substantially less investment than the country’s resources and technical expertise warrant.
The report says that although the mining sector no longer dominates the South African economy as it once did‚ mining accounts for a major proportion of the country’s earnings of foreign exchange.
The author of the report‚ IRR policy fellow John Kane-Berman‚ said there were two ways of looking at mining in South Africa.
“The first is to see it as a sunset industry plagued by rising costs‚ technical difficulties and political hostility. The second is to see it as an industry well positioned for a new lease of life despite all the vicissitudes‚” Kane-Berman said.
He said even though the attractiveness of South Africa for mining investment had declined‚ the country still had the world’s richest reserves of precious minerals and base metals.
He said companies large and small would like to exploit these.
“Some are doing so despite the political threats. Even more will do so if the threats can be effectively managed or reduced.
“According to the Chamber of Mines‚ investment over the next few years could almost double in the absence of threats.”
The report said the pervasive pessimism in the mining sector had resulted in major companies no longer investing in the country’s mining industry.
Whether the industry was not merely to survive but to thrive and grow rested mainly in the hands of Ramaphosa.
“He alone has the power to replace the present hostile environment with policies that welcome and encourage this vital industry.”
The report said Ramaphosa’s election as ANC president in December and some of the comments he made at the World Economic Forum in Davos caused some mining executives to adopt a mood of cautious optimism.
Ramaphosa said at Davos that the Mining Charter would be “thoroughly discussed with key role players so that we find a solution to unlock our mining industry for South Africa to benefit from this boom”.
The report said that provided Ramaphosa can get rid of President Jacob Zuma‚ “he alone in South Africa will have the power to replace the present hostile policy environment with policies that welcome and encourage this vital industry”.