Investors are pulling out of South African mines – despite the abundance of gold, platinum and manganese, amongst others – and are showing reluctance to invest further in the country, according to delegates attending the Mining Indaba in Cape Town this week.
Investor confidence has taken a major knock over strikes, unreliable power supply, a mining code that’s been under review for six years, as well as disputes over compulsory holdings by local black shareholders.
BHP Billiton, the world’s biggest miner, exited South Africa last year.
“Investors want certainty, they want a clear regulatory environment, and they want an environment where companies are not held hostage by unreasonable demands and unreasonable cost escalations,” Neal Froneman, chief executive officer of Sibanye Gold was cited by news site, IOL, as saying. “They can’t operate or invest in the current environment.”
South Africa’s mining industry makes up just 4.4 % of global mining stocks, down from 18% in 2000 and 47% in 1980, according to a presentation by Jim Rutherford, non-executive director of Anglo American.
