South Africa needs to stabilise its state-owned entities if it wants to keep its mining sector intact.That was the advice from mining companies who said that energy instability, the lack of rail and port infrastructure, as well as congestion were affecting the mining sector’s global competitiveness.“South Africa is improving its credibility as a mining destination,” said Mike Fraser, CEO of South 32. “But there are urgent steps that can boost South Africa’s and the region’s attractiveness to mining and industrial development.”These include action on fiscal policy to stabilise the fiscal deficit and state debt as well as regulatory and structural reforms to revitalise the economy.Addressing the challenges around state-owned entities, he said, was just as critical. “Stabilising our state-owned entities will mean that hard decisions need to be taken to close or sell those that are not competitive. State-owned enterprises that are key enablers of economic grow th – such as Transnet and Eskom – must support competitive industry.”Fraser said reducing Eskom’s primary fuel costs would not come from slashing the prices paid by long-term stable coal suppliers, but instead by procuring less from high-cost suppliers.Calling for urgent action to address Eskom’s technical performance, Fraser said collaboration to develop inland terminals and move coal transportation off the roads and onto rail and conveyors should also be prioritised.Mxolisi Mgojo, CEO of Exxaro Resources, said the country’s transport and telecommunications infrastructure needed to be modernised.“What is needed now is a range of steps to address the constraints and tofacilitate optimal growth in the mining sectors that are growing, and to slow down the decline of those that are contracting.”According to Mgojo, manganese, iron ore, coal and chrome in particular are show ing encouraging signs of growth.
INSERT: Stabilising our state-owned entities will mean that hard decisions need to be taken.– Mike Fraser