In his keynote speech delivered at the 2018 Mining Indaba this morning, Minister Mosebenzi Zwane again failed to address the ongoing regulatory uncertainty bedeviling the South African mining industry.
Comment from Peter Leon, partner and co-chair of Herbert Smith Freehills’ Africa practice, in response to Minister Mosebenzi Zwane’s opening speech at Mining Indaba this morning:
Minister Mosebenzi Zwane rather surprisingly claimed that the government had created an enabling environment for mining. Not only did Minister Mosebenzi Zwane not expand on this, but said nothing about the contested Mining Charter – now the subject of a judicial review later this month by the Chamber of Mines – or the MPRDA Bill which has lingered in Parliament for the last five years.
Mining is a high risk, capital intensive, long term industry which requires regulatory certainty and predictability.
Commodity prices have recovered significantly over the last year, helping to substantially drive up the market capitalization of major mining companies.
Unless the government urgently implements measures to address the issues deterring investors, South Africa will – once again – fail to capitalize on any new commodities boom.
Government needs to understand that capital is unsentimental and will go where it gets the best returns.
Government urgently needs to create a proper enabling environment for mining in South Africa and will only succeed in doing so if it formulates a comprehensive strategy to lift the mining industry out of its current crisis and set it on a new path based on mutual understanding and benefit among all stakeholders.
Feature image credit: eNCA