New Mining Charter is stable enough to draw foreign investment to SA mining
Following a period of turbulence, the South African mining sector is likely to benefit from the newly introduced stable policy framework that is designed to attract and secure foreign investment into the sector, according to Leader for Africa Energy and Resources at Deloitte Andrew Lane.
The new policy framework was announced by South Africa’s Minister for Mineral Resources Gwede Mantashe at the 25th edition of the Investing in African Mining Indaba that was held in Cape Town. At its core, the new policy allows security of tenure for foreign investors in the mining sector.
The announcement was accompanied by an acknowledgment that the mining sector had done little to support the South African economy during its prolonged economic slowdown in recent years. A dip in global oil and commodity prices in 2014 brought about a major dent in revenues for South Africa, a situation from which it is still recovering.
Drawing foreign investment has been the new President’s remedy to the situation, and Mantashe is applying the same formula to the mining sector, which currently comprises approximately 10% of South Africa’s GDP. The sector’s revenues and market capitalisation have been in steady decline since the dip in commodity prices.
According to Mantashe, the relative stability of the new formalised Mining Charter provides an opportunity for foreign investors to familiarize themselves with the conditions in the sector before deciding to invest. Mantashe also called for an increase in exploration and an improvement in techniques therein to help boost the domestic sector.
Andrew Lane at Deloitte has endorsed these announcements. “We welcome his accentuation of investment in African mining and his clear call for attracting investment to the continent. Very importantly Minister Mantashe acknowledged the importance of mining companies being profitable. This is a great acknowledgement from government. At the core it is through profitable mining activities that communities are able to benefit,” he said.
“Along with the dti, Minister Mantashe stressed the importance of fuel cells to drive platinum demand. Given the importance of this we should have a state policy and the state apparatus should be driving procurement and demand for fuel cell-based vehicles,” he added.
Deloitte has been particularly active in its efforts to support the mining sector in South Africa through its period of struggle. After endorsing an introduction of digital applications in the sector, the firm introduced an integrated mining solution for the sector that would make operations more efficient.
