Mining indaba kicks off with false hope

The mining industry in South Africa is not necessarily the bed of roses as described by Minister of Mineral Resources Susan Shabangu yesterday. Officially opening the 20th annual Mining Indaba in Cape Town, Shabangu said there was too much of a focus on labour instability in the South African mining sector and that government had intervened boldly and taken decisive action to restore stability in the sector. Whilst Shabangu stressed that no mining companies would be required to beneficiate or be forced to subsidise the manufacturing industry, she also guaranteed that amendments to and streamlining of mining legislation in the country would ultimately create an environment for growth of the industry. But experts have raised concern following what many have deemed an overly optimistic outlook on mining in the country. Lauren Patlansky, managing director of Grant Thornton’s Asia Business Services, said the overly positive address was a little surprising particularly if one took the dramatic losses of the platinum and gold industries in recent years into consideration. “They are losing billions due to strike action specifically,” said Patlansky. “In addition, the Minister’s positive address failed to mention how labour costs continue to rise while commodity prices are simultaneously declining – this paints a clear picture that mines in South Africa are not even breaking even.” Also lacking from the minister’s speech was the issue of power and energy – a major challenge being experienced by mines in South Africa.