Mining experts suggest that a policy change will greatly help South Africa with boosting its mining industry and keep up with Congo and Zambia, which have seen exponential growth in mining production in the past decade.
Commenting on how the country lags behind its neighbors and how investors are looking at it, Peter Major, head of mining at Cadiz Corporate Solutions, stated during the Deloitte’s Africa Outlook 2017:
“We haven’t had a policy change here since 1994, which will keep pushing our production down, which does not make it a good investment destination.
“Yes, they want existing projects, but most of all they want policy . . . this is more important than anything else by far, more than commodity prices, orebodies, and infrastructure.”
Aside from Major, founder of consultancy firm To the Point, Bernard Swanepoel, also said that the delayed action by the mining industry to adjust to the drop in commodity prices has prevented the government from realizing the graveness of the issue. He also brought up the mistake of appointing more people than is economically viable in the country’s mines.
On a similar note, Chris Sturgess from JSE Commodities Derivatives said that getting the full benefit thereof will also depend on correct timing, with or without the appropriate policies. He stated, “[Governments are tempted] in a commodities boom to also get a piece of the pie. What we have seen over the last few years, preceding the drop in commodity prices, were governments that were looking at how to get more out of this pie, where policy decisions have flown out, but the timing was wrong.”
Sturgess added that commodity pricing and policy challenges normally exist not only in the mining sector, but also in other industries such as agriculture.