Council dismay after Fraser Institute again consigns SA mining to lower reaches

SOUTH Africa’s Minerals Council expressed dismay after the country’s mining sector was for the second year running placed among the least 10 attractive mining districts by the influential Fraser Survey.

“It is disappointing that South Africa remains poorly perceived as a global mining jurisdiction, but there are fundamental problems in our country that need to be addressed,” said Roger Baxter, the outgoing CEO of the Minerals Council.

He said the council was due to meet the Department of Mineral Resources & Energy to discuss the survey’s latest findings.

South Africa placed 57 out of 62 in the Fraser Institute’s overall investment attractiveness index compared to last year’s position of 75 out of 84 jurisdictions. Last year was the first time the country ranked in the bottom ten, said the council.

Respondents to the survey are asked to rate the world’s mining districts across 15 different criteria. One, related to policy attractiveness, saw South Africa slip to 53 out of 62 from 65 out of 84 jurisdictions the year before.

This particular ranking took in considerations such as South Africa’s infrastructural constraints, including power shortages and a rapid decline in the performance of Transnet, the government-owned ports and rail company. Labour market constraints also weighted heavily on South Africa in this regard.

Baxter said there were some flickers of hope in terms of ameliorating infrastructural deficits following the establishment by President Cyril Ramaphosa of the National Logistics Crisis Committee (NLCC) to address the rail and ports crisis.

“There has been encouraging progress in energy reforms with the establishment of the National Electricity Crisis Committee (NECOM) and the government implementing significant reforms to enable greater private sector investment in electricity generation,” Baxter said.

However, he stopped short of an update on discussions between the council and Transnet which agreed to fix rail deficits in manganese, chrome, coal and iron ore.

Another potential green shoot was the DMRE’s request for proposals for a new mineral prospecting and mining licence system – a cadastre – aimed at replacing the “dysfunctional” SAMRAD system. This new system is, however, years late after Government botched the procurement process for its own bespoke system.

Said the council: “It is critical to have a transparent, off-the-shelf, proven, online cadastral system to encourage investment in exploration and to expedite the processing of prospecting and mining right applications”.

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