Although there was some speculation related to whether or not Minister Zwane would give the speech, he arrived and delivered what some Indaba goers are calling a ‘below par’ keynote address.
Jacques Barradas, partner and head of mining, at Grant Thornton Johannesburg, attended the opening of Indaba 2018 and commented on some of the highlights in Zwane’s speech; what this speech is likely to mean for the industry – what it said, what it failed to say and perhaps what it could have said.
Overall comment / insight:
“The opening address by the minister lacked hard substance which was unfortunate. The mining community wanted to hear direction and resolution to some significant issues in the South African context but nothing came forth in the Minister’s speech.”
On supposed “conservatism” in the mining sector:
“The minister noted that ‘the spring in mining is indeed blossoming into a summer.’ The Minister further added that new projects and exploration had not come on stream as yet due to the conservatism of the market. My opinion is that this conservatism is due to the lack of direction by the government for the mining sector. In my view the mining industry needs government direction and certainty in order for them to invest into new projects.”
On driving beneficiation and manufacturing:
“We applaud the Minister’s call this morning for the mining industry to lead a drive for the beneficiation and manufacturing of the metals being mined in South Africa. This is exactly what the country needs to assist with the huge unemployment rate in our economy. But the industry also needs government to give the incentives for this to occur. We need to see that government is serious about the incentives by driving big projects to showcase these initiatives.”
On SA’s stable energy supply:
“The minister reiterated this during his opening address that South Africa’s energy supply has stabilised and there is sufficient capacity for new enterprises. This news is pleasing but we are still worried about the issues currently being experienced by ESKOM. These concerns are worrying and investors or prospective new projects will demand more certainty for pricing and generation capacity for the long term.”
On SA’s “open-door” policy to new developments:
During his presentation, the Minister mentioned that there is an ‘open-door policy’ to prioritise the promotion of good working relations with the right holders.
Barradas concluded and said, “We believe that the Ministry needs to demonstrate this more visibly going forward, particularly with all stakeholders on issues such as the Revised Mining Charter III, which was announced last year. The reaction to the Minister’s unilateral implementation of the Charter last year has not inspired investor confidence.
“In fact, we believe that foreign investor confidence was impacted by this implementation process.”
A copy of the Ministers speech is available here