South African Minister Says Mining Industry Must Be Competitive
Stock Chart for Harmony Gold Mining Co Ltd (HAR)
South Africa’s mineral resources minister said the country must ensure its mining industry, the world’s largest producer of platinum and chrome, remains competitive even as the ruling African National Congress looks for ways to impose more taxes or royalties.
“For a thriving mining industry in South Africa, we’ve got to compete against Australia, Canada and all other mining jurisdictions,” Susan Shabangu said in a speech in Cape Town yesterday. “If there are any taxes which must be implemented, we will have to be mindful we have to come up with a tax dispensation which is going to make us competitive.”
At its national conference in December, the ANC rejected proposals to nationalize mines in favor of a tax review. The party is considering a “resource-rent” tax or higher royalties, details of which must be worked out by the government, Enoch Godongwana, head of the ANC’s economic transformation committee, said Dec. 20.
Shabangu’s comments yesterday came at start of the four-day annual Investing in African Mining Indaba conference, a gathering of more than 7,500 industry executives. She’s due to address the event today.
Mining companies in Africa’s largest economy are battling to contain rising production costs after a series of strikes last year led to above-inflation wage increases. Nine platinum- mine shafts were shut in the second half of 2012, according to the Department of Mineral Resources. Anglo Platinum Ltd. (AMS), the largest producer of the metal, on Jan. 15 announced plans to idle four shafts.
Mining makes up about 9 percent of gross domestic product and accounts for two-thirds of exports.
Shabangu also said yesterday the government will address industry concern that planned changes to the country’s Mineral and Petroleum Resources Development Act will increase ministerial discretion over mining.
“These are proposals and it’s open for everybody to make their inputs,” she told reporters. Investors “need to come forward and say what’s not fair and for us to come up with the legislation which will be workable and while will also be able to attract investment.”
To contact the reporter on this story: Mike Cohen in Cape Town at email@example.com;
To contact the editor responsible for this story: Nasreen Seria at firstname.lastname@example.org
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.