Billionaire Motsepe Says Lack of Trust Hurts South Africa MiningBy
African Rainbow founder says industry needs more investment
Favorable regulatory environment key to attracting investors
Billionaire Patrice Motsepe said a lack of trust among South African mining companies, labor unions and the government is undermining prospects for an industry facing at least 11,000 job cuts as commodity prices tumble.
“There is a fundamental trust deficit there, and we have to go beyond that trust deficit,” Motsepe, 53, executive chairman of African Rainbow Minerals Ltd., said on Friday at a presentation in Johannesburg.
Mining companies in South Africa, the world’s largest platinum and manganese producer, are scaling down operations and reducing staff at a time when the economy is struggling to rebound from the slowest expansion since a 2009 recession. Protests near mines have also disrupted output as community members accuse companies of reneging on promises to employ locals and improve infrastructure. Walkouts by unions during wage disputes have shut the operations of some producers for as long as five months at a time.
Investors “have a choice of investing in mining companies all over the world, as well as investing in industries that are significantly more stable, more reliable, less risky and much more competitive in every sense of the word,” Motsepe said.
While commodity prices are outside of the control of most mining companies in South Africa, the government needs to address concerns it has power over, such as a regulatory environment that will make it attractive for businesses, Motsepe said.
“At the heart of more jobs, better education, better living conditions is a country that is globally attractive and competitive for private-sector investment,” he said.
Motsepe has seen the value of his 40 percent stake in African Rainbow slump to 6 billion rand ($437 million) from about 20 billion rand in March last year amid a plunge in the company’s share price in the period.
South Africa’s mining industry employs about 440,000 people and accounts for more than half of the nation’s exports. Built on the back of cheap black labor under apartheid, the industry has faced repeated criticism from unions and some politicians for not doing enough to spread wealth to the poor.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- Uber Victim Stepped Suddenly in Front of Self-Driving Car
- Facebook Sued by Investors Over Voter-Profile Harvesting
- Cambridge Analytica's Board Suspends CEO Nix Amid Inquiry
- How Facebook Made Its Cambridge Analytica Data Crisis Even Worse
- Facebook Just Lost More Than Tesla's Entire Market Cap in Two Days