BUSINESS NEWS - South Africa is sending the wrong message to foreign investors, a mining analyst has warned.
Speaking at The Director’s Event on Friday, Peter Major, director for mining at Cadiz Corporate Solutions, said this has stymied the economy, even though interest rates have been low and commodity prices have improved.
Investors had turned the page, Major said. Until South Africa changed course and gave them a reason to invest, they wouldn’t.
“Why will they [foreign investors] come here? Because they want to make money on their money. We don’t even tell investors you are going to get your money back. We say: ‘Put your money here. We are going to take some of it to pay for past problems’, even though a lot of these investors had nothing to do with it.”
Major said South Africa should lure investors with excellent returns the way Zambia and Zaire had done in the new millennium, but instead it was passing mining charters and contemplating various mining taxes.
But Enoch Godongwana, chairperson of the ANC’s sub-committee on economic transformation, said Major was not being fair. The ruling party’s thinking around mining had “completely changed” since a former mining official made a controversial speech at the Australian Mining Indaba, something Major cited as an example of South Africa “saying the wrong things”.
Godongwana said minister of mineral resources Gwede Mantashe’s strategy is clear. South Africa is rated 74th out of 91 countries in terms of its attractiveness as a mining investment destination. With regards to policy, it sits in 89th position. Given the country’s resource base, it should be at 21.
“That is where we are heading at the moment,” Godongwana said.
Mantashe has set up two committees to work with the Chamber of Mines. One is looking at inclusive growth, while the other is investigating how to fine-tune the charter in a way that is compatible with its strategy on competitiveness and inclusive growth.
Godongwana was adamant that the country could rise in the rankings if stakeholders worked together.
“We can sit at number 21. The Chamber of Mines is predicting that if we achieve that, we can grow the mining sector four times.”
Godongwana admitted that the ANC had made mistakes.
“I would not be honest with this audience if I say over the last few years we have not made a number of mistakes. We have made a number of mistakes, which some of us have admitted publicly,” he said.
