Ellis Mnyandu Davos, Switzerland
EFFORTS to bring stability to the mining sector had begun to yield results as government, labour and business were working together to ensure that progress was made to resolve pressing issues confronting the industry, President Jacob Zuma said yesterday.
Speaking in an interview with Business Report in Davos, Switzerland on the sidelines of the World Economic Forum annual meeting, Zuma said stability in mining was critical as it would contribute to bolstering South Africa’s appeal to global investors.
While in Davos, Zuma has held a number of meetings with key mining sector stakeholders, including an engagement on Wednesday between him and Mark Cutifani, the chief executive of Anglo American, one of the world’s biggest mining companies.
“Incidentally we have seen some people in the mining sector, and have had good discussions and indeed that sector is coming together,” said Zuma.
“We have had some comfort in the manner in which the sector feels about itself and about the country. But of course there is a recognition that there are in-built problems within that sector which (the leadership of the sector) are dealing with.”
Zuma’s comments represent the most explicit acknowledgement to date of the progress that has been made in stabilising the mining industry following a damaging five-month platinum sector strike that cost the industry and the unions billions of rand in lost revenue and wages last year.
And having described mining as a “backbone” of the South African economy during his speech at a Davos briefing on South Africa on Wednesday, Zuma went some distance to assure business and other stakeholders that the government takes mining seriously.
In the interview, Zuma said the backdrop for his discussion on the margins of Davos included the fact that the mining sector was heading into another cycle of wage negotiations.
He said “the lessons from Marikana” had made finding solutions a key priority in the sector.
Marikana refers to a town in the Rustenburg platinum belt where more than 40 people, mostly striking miners, were killed in a confrontation with police in August 2012.
“I think the initiative that we took to have joint discussions with business, labour and government are paying off because we talked very specifically with the mining people here to say, what is the situation right now because we are getting back to the cycle of negotiations,” said Zuma.
He said his discussions also looked into whether “we are expecting other bubbles that would be problematic”.
But mining industry leaders “seem to be confident that the discussions have gone very well so far. There is no anxiety that things are not going to go well. They seem to think we have taken things to a particular level.”
He said stability in the mining sector would go a long way in reassuring even the credit ratings agencies about the country.
“Even the rating agencies look at the mining sector, it influences them in the main,” said Zuma.
In Davos, Zuma is accompanied by several officials and key government ministers, including Minister of Mineral Resources Ngoako Ramatlhodi, Finance Minister Nhlanhla Nene, Trade and Industry Minister Rob Davies and Economic Minister Ebrahim Patel.
Zuma said the investment horizon was looking brighter for South Africa.
“There are many companies who see South Africa as a destination. When we meet people, they are interested to know what South Africa is offering. And we have been able to indicate what South Africa is offering and the interest is there,” he said in the interview.
On Wednesday night Lonmin chief executive Ben Magara told a banquet in Davos that the platinum producer had seen business “ramp up phenomenally” since the end of the platinum sector strike, but acknowledged the need for labour, business and government to continue to work together to stabilise the industry.
Magara was pleased that Lonmin had now operated for seven months without any incident.
Although mining’s share of the economy has been shrinking over the years, the industry still accounts for the bulk of South Africa’s foreign earnings and is a critical pillar for employment.
There are some 500 000 people employed in the mining industry, who in turn support hundreds of thousands of households.