Mining Companies Are Suddenly Positive on South Africa AgainBy
Cyril Ramaphosa isn’t even president yet and mining companies are already changing their tune on South Africa.
A former mine union leader and now one of the wealthiest black South Africans, the new leader of the ruling African National Congress is seen as more willing to negotiate investor-friendly policy, according to executives attending the African Mining Indaba conference in Cape Town this week. That’s partly after he told reporters in Davos that if the contentious Mining Charter is “holding us back, then we must deal with it.”
Years of uncertainty have weighed on investor sentiment and reached a boiling point last year when Mineral Resources Minister Mosebenzi Zwane published the new set of rules, with one top mining chief executive officer saying it made South Africa “uninvestable.” The industry has taken Zwane to court and refuses to engage with him anywhere else.
Ramaphosa’s rise to leader of the ruling party, clearing the way for a potential presidency, is sparking optimism across the industry, from Anglo American Plc to juniors like DRDGold Ltd., which extracts gold from mine waste. The Chamber of Mines lobby group has written to Ramaphosa asking for a meeting, representatives said Tuesday.
“We have got some momentum that has started happening, we are hoping that momentum will be maintained,” Anglo’s deputy chairman of its South African unit, Norman Mbazima, said Monday. “There has been a lot of informal contact with officials.”
South Africa has the world’s largest reserves of platinum and chrome and is the source of one-third of all gold ever mined.
The industry’s hopeful it’s entering a “new phase,” said DRDGold Chief Executive Officer Niel Pretorius, adding he’d be more confident of being able to raise capital in the current environment. “I am very optimistic.”