The annual Mining Indaba in Cape Town is a national asset. It should be a time when the potential of South Africa’s mineral endowment and the dynamism of the industry are showcased for potential investors.
Just as reliable as the influx of investors from the rest of the world is the dampener imposed by Mining Minister Gwede Mantashe.
He performed as usual when he spoke at the conference yesterday, confirming the continuation of BEE ownership demands and trying to persuade neighbouring countries to adopt South Africa’s investor-unfriendly policies.
Evidence of Mantashe’s half-baked thinking is his statement that “Many say BEE is driving investors out. It is not.”
BEE requirements have ensured opportunity results in the continued re-enrichment of a select group of cadres, while simultaneously driving away investment and job creation for the poor.
How else would he account for South Africa attracting relatively little investment compared to our neighbours, despite our rich geological endowment?
A further tacit acknowledgement of the drag that BEE places on investment was Mantashe’s emphasis that mining exploration had been excluded from BEE requirements.
If, as he claims, BEE is not a brake on investment, there would be no need to exclude BEE requirements from exploration projects.
Mantashe also called on African countries to work together. He said they should “speak in one voice, and avoid the destructive race to the bottom in our engagement with global powers and investors.”
This is a continuation of a theme he’s raised before. Mantashe seems concerned that other African countries are more successful at attracting investors than South Africa (because of our BEE, generally poor legislation and bad administration).
If other countries adopted ANC mining rules, they would end their own competitive advantage. What Mantashe is advocating is precisely the race to the bottom he is warning against.
If South African mining is to live up to its potential to drive our economic growth, South Africa needs to change its mining law and administration and prioritise the attracting of investment in mining, which will create much-needed jobs.