South African mining executives, investors and officials gather in the nation’s economic hub for the Joburg Indaba conference, a week after Mineral Resources Minister Gwede Mantashe published the government’s new Mining Charter.
It’s been a tough couple of years for South African mining, from regulatory uncertainty and legal fights with the government, to thousands of job cuts announced across the industry. National gold production has declined for 10 straight months.
Here are the latest developments, updated throughout the day. (Time-stamps are local time in Johannesburg.)
Platinum Mea Culpa (5 p.m.)
Platinum miners hurt themselves over the past decade by failing to notice and respond quickly enough to dwindling demand for the metal, according to the head of the world’s top producer.
“We were slow to recognize structural changes when platinum demand started falling and was being substituted,” said Anglo American Platinum Ltd. Chief Executive Officer Chris Griffith. “That was a mistake, we failed to stop supply from lossmaking mines, then we became our own worst enemies in the face of declining demand.”
The industry has since taken some necessary steps and is in better shape to provide returns to investors, he said. The sector would benefit from further consolidation, said Lonmin Plc CEO Ben Magara, whose company last year agreed to a takeover by Sibanye Gold Ltd.
Anglo Welcomes Charter (1:10 p.m.)
South Africa’s new mining charter sends an “excellent message” to mining investors, particularly producers with existing mining rights, said Norman Mbazima, deputy chairman of Anglo American Plc’s South African unit. The industry can work with the new mining rules and should be able to expand production, he said. The document does contain “little niggles” that need to be sorted out.
Technology Laggard (12:45 p.m.)
South Africa’s mining industry hasn’t kept pace with global peers in investing in technology and innovation, to the extent that the sector has become a “dinosaur,” said Blackrock World Mining Trust Chairman Ian Cockerill. One reason the local industry lags behind in automation and new technology is that “fear of losing jobs continues to take this important topic off the table,” said Vedanta Resources Plc African base metals CEO Deshnee Naidoo.
Watershed Year (12:20 p.m.)
South Africa’s mining sector is at a “watershed” after the publication of the much-anticipated mining charter, said Minerals Council South Africa President Mxolisi Mgojo. He repeated the industry’s broad support for the document and said that the implementation guidelines promised by Mantashe’s department will be crucial to determining the impact of the charter. The council’s hoping to be consulted before they’re finished, he said.
Minerals Council CEO Roger Baxter (10:10 a.m.)
The implementation guidelines for South Africa’s new mining charter must be “practical and realistic,” said Roger Baxter, chief executive officer of the Minerals Council, which represents producers.
The country’s mining industry could double investment in four years and create 50,000 jobs if the climate improves, he said in a speech at the conference in Johannesburg.
Minister of Mineral Resources Gwede Mantashe (9:40 a.m.)
Minister Mantashe said South Africa is discussing a sovereign wealth fund, which would be connected to the “extractives” industry. The government must “find a way of doing it without hurting the sector,” he said, adding that greater state involvement in mining might entitle it to a larger share of the profits.
Mantashe, who began his decades of experience in the industry as a mineworker, insisted the nation’s mining sector can still grow, following his publication of a new charter.
In a jab at Gold Fields Ltd., Mantashe said it “doesn’t make sense’’ that the company has spent billions of rand and hasn’t reached the deposit — a reference to its South Deep mine.
The minister encouraged job creation, part of a wider initiative by President Cyril Ramaphosa, and more equitable compensation. “It is a worker that converts that investment into wealth, so you should be comfortable with giving them some stake,’’ he said.
Minerals Council ‘Broadly Supports’ Mining Charter (8:30 a.m.)
The latest charter “provides a clear and durable framework for securing a transformed industry with meaningful broad-based economic empowerment,” while boosting growth and competitiveness, said the Minerals Council of South Africa, which represents most producers.
Producers in the world’s top supplier of platinum welcomed the scrapping of a requirement for companies with existing mining rights to raise their black-investor shareholding threshold to 30 percent from 26 percent. The adoption of “carried interest” — a 5 percent interest each for workers and communities in new mining right holders — was another positive, the council said.
“The Minerals Council congratulates Minister Mantashe in the expeditious finalization and gazetting of the Mining Charter,” council President Mxolisi Mgojo said in a statement. “It is perhaps a sign that he has struck a reasonable balance, where all stakeholders are not totally happy.”