In an interview on CNN’s Global Exchange with John Defterios, Patrice Motsepe, the founder and executive chairman of African Rainbow Minerals, reflected on the importance of the mining industry and the need for South Africa to shore up investor confidence. The interview was originally aired on January 29. What follows are edited highlights based on a transcript that was supplied to Business Report.
Motsepe: South Africa is a mining country. We have to maintain investor confidence, and the partnership we’ve been establishing over many years – with the government and labour – will face challenges. Workers are demanding more money; there are lots of challenges in terms of leadership among worker representatives and in terms of better environments where their families live, quite apart from better working conditions. These are challenges but I am confident that, as an industry, we will overcome them.
Defterios: You say that because you’ve had three rating downgrades from three different agencies suggesting that the political climate has now changed, not because of the mining sector but mixed messages coming from the president about how much intervention we’re going to have in mining and how much spending there’s going to be on infrastructure with a very high current account deficit. How do you bridge that gap?
Motsepe: There’s an absolute appreciation within the government that South Africa has to send a message that gives confidence, that gives comfort to the global investment community. There will be challenges, but there’s a total commitment and I’m confident that as we move forward… investor confidence will be regained.
Defterios: You know, it’s interesting because growth of 2.5 percent in South Africa in 2012 [is below the] 5.5 percent for sub-Saharan Africa. South Africa has become the great underdog story – it’s not punching above its weight, it’s actually well below its weight. And why is that?
Motsepe: South Africa has got exceptional entrepreneurs and companies. We will do well in terms of, not only investment in the country, but we are a major investor on the continent. The growth of the continent, in many ways of the sub-Saharan countries, is to a large extent because of the huge investments we are making in those countries.
There are lots of challenges and competition. South Africa, to some extent, is a very mature economy; we’ve been in the mining industry for more than 100 years. And there will be those challenges where we need to be more innovative – we need to restructure relationships with labour and we’ve got to look at ways to make our companies more competitive.
Defterios: Final point – Cyril Ramaphosa’s comeback into politics after going where you did, and that is in the mining sector. A long-serving ANC member, but one that is kind of pro-business. Is this going to put a nice touch on the ANC and soften up [President] Jacob Zuma from the talk of interventionist measures in the mining business?
Motsepe: I’ve had a lot of positive feedback in the business community about some of the discussions they’ve had with the ANC, before going to the conference in December. Cyril has got experience in business, a huge advantage. But I think I need to emphasise that in our engagement with the government there’s a clear realisation that the best way to create jobs and alleviate poverty is to create a globally competitive economy for the private sector and that commitment is there.