A third of the country’s largest mining companies are not considering any new investments in the country while at least one is contemplating divesting from the country altogether. This was the finding of an investment study conducted by the Chamber of Mines involving 16 major mining houses accounting for over 80% of national mining in the country. Released at the annual Investing in Africa Mining Indaba recently, the survey was intended to provide an understanding of the investment and employment potential of the mining sector – and more so should best practices return. “We like ‘what if ’ questions,” said Chamber of Mines CEO Roger Baxter. “The survey particularly asked what the investment spend would be if the South African mining sector could get back into the top 25% of investment attractiveness rankings.” South Africa currently ranks 74th in the World Bank 2017 Doing Business ranking – with investment in the sector continuing to drop and projects on hold across the various commodities. According to Baxter most of the companies that participated in the survey, including the likes of Anglo American and SibanyeStillwater, stressed that mining investment was generally dependent on a wide variety of issues over and above the political and policy stability of the operating environment. “The purpose of this study was, however, to attempt to isolate the impact of the policy environment on the operating environment and on investment,” said Baxter. While the survey found that capital expenditure on mining projects could be 84% higher than the current R145 billion, some responses were particularly sobering. “A third of the companies said they were not considering any potential new investments in 2018 with one even thinking about pulling out completely,” he said. “This decision will be taken in 2018 if the situation does not improve. They either could not see worthwhile investment opportunities in the project pipeline or the adverse environment had resulted in them focusing their efforts elsewhere in the world.” Baxter said what was clear from the survey was that companies were holding back on investment due to the lack of political and policy stability. “The estimated current capital spending in the mining sector over the next few years is R145bn. Our survey found that if South Africa could improve its investment attractiveness ranking and create a more certain and conducive operating environment, this outlay could increase by another R122 billion.”
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