JOHANNESBURG - Anglo American plc chief executive Mark Cutifani believes South Africa is at a crossroads and decisive action is needed to change the country’s fortunes.
Cutifani told the virtual Joburg 2020 Indaba that it had become standard for the mining industry - and business more broadly - to make a case for urgent reforms for South Africa’s present and future.
“Sometimes, it feels like we’re repeating the same script, over and over again, anxiously waiting for the change we desperately need. But there is something about this moment that is different. We are at a crossroads. We can continue on this unsustainable path, or we can seize the day to turn the corner,” said Cutifani.
The industry has continuously decried the regulatory and policy uncertainty which has often prevented long-term decisions from being made and had a huge impact on investment hurdle rates.
However, Cutifani said there were green shoots. Mineral Resources and Energy Minister Gwede Mantashe’s withdrawal of government’s appeal on “the continuing consequences of previous empowerment transactions” under the new Mining Charter had filled the industry with optimism.
“While there is still a lot that can be done to bring more regulatory certainty, this move paves the way to legal certainty over the current Mining Charter, which further strengthens our collective commitment to transformation as an industry,” said Cutifani.
He said that the leadership changes at Eskom and Transnet and Finance Minister Tito Mboweni’s measures to facilitate cross-border financial transactions to provide South African multinational companies with the flexibility to optimally manage cash resources were steps in the right direction.
Cutifani said the pandemic had allowed the industry to press the great “reset” button. “We can play a leading role in shaping the next 10 years by building a modern mining industry that embraces innovation and sustainability, while making the industry more inclusive, and developing equitable relationships with our host communities,” he said.
Minerals Council SA chief executive Roger Baxter said Covid-19 had created a catalyst for a reset button and that the industry was aiming to contribute towards 10percent of gross domestic product (GDP) and increasing South Africa’s share of the global exploration share to 3percent in the next five years up from the current 1percent.
“We do have a significant level of engagement taking place with the government, and this is a great opportunity for us to unlock the industry’s potential and help the industry get back to contributing 10percent of GDP. We have a leadership compact, but we need to include our communities,” he said.
Baxter also noted that the Covid-19 lockdown had a big impact on production, and the industry now had 350000 employees back at work, short of 90000 less than the industry average. However, there were improvements in August and last month, he said.
“The saviour has been the strong dollar commodity prices and the weaker rand which had a positive impact on the revenue streams of mining companies,” Baxter added.
The Indaba continues today.
BUSINESS REPORT