The head of Anglo American’s assets in South Africa has slammed the country’s regulatory environment.
Speaking at the Investing in Africa Mining Indaba in Cape Town, Norman Mbazima said the damage caused by poor and inconsistent policy-making could not be underestimated, citing the impasse over the country’s controversial mining charter.
He said the relationship between the industry and the Department of Mineral Resources was at an all time low. “Very large amounts of capital are needed to start a mine. Your capital is deployed over a very long period of time before it can be recouped. It is for this reason that investors require a clear, concise and consistent regulatory environment to justify investing,” said Mr Mbazima.
“At present, we have anything but a conducive regulatory environment.”
Under proposed changes to the mining charter, the government wants at least 30 per cent of the sector to be owned by black investors under measures to redress sharp economic inequality.
Miners will also be forced to raise stakes up to the new limit even after previous black investors have sold out.
This move has been opposed by the industry, which has taken legal action, and a judgement is pending on the “once empowered, always empowered principle”.
Mr Mbazima said Anglo, which generates a large chunk of its earnings in South Africa, was encouraged by the appointment in December of Cyril Ramaphosa as head of the ruling African National Congress party.
Mr Ramaphosa, who is line to replace Jacob Zuma as president, has said that urgent action is needed to resolve the current impasse over the Mining Charter, which is tied up in legal challenges.
“I am very hopeful that with the improvement in the political environment that we have seen since December, we can now find the ‘reset’ button and get back around the table. I cannot wait to participate in this,” said Mr Mbazima.
The architect of the charter, South Africa’s mining Mosebenzi Zwane, was also speaking at the conference on Monday. But he did not touch on the charter in his address, much to the disappointment of delegates.
Source: FT.com
