Key Points
- South African mining industry warns over-regulation threatens jobs and growth.
- New mining laws risk scaring off crucial foreign investment.
- Industry leaders demand balance between sustainable growth and accountability.
JOHANNESBURG — Executives in South Africa’s mining industry, which is often called the backbone of the continent’s most industrialized economy, are increasingly at odds with policymakers over what they see as too much red tape and rules that change all the time. People in charge of the industry say that the country could lose its competitive edge to faster-moving African countries.
Changes to the law that are being talked about include stricter rules for the environment and tougher ownership requirements for Black Economic Empowerment (BEE). Industry leaders say that these steps, while well-meaning, have added layers of uncertainty that could hurt exploration and investment.
The mining industry is against regulation
Roger Baxter, the head of the Minerals Council South Africa, said that the country’s many overlapping laws have made it less appealing to investors. “We support change, but the slow and inconsistent pace of regulation is making people less likely to spend money on exploration,” he said.
According to a report by Mining review, Neal Froneman, the CEO of Sibanye Stillwater, agreed with those worries and said that foreign investors now see Botswana and Namibia as safer places to invest. Froneman said, “We can’t increase output or jobs if rules change every other year.”
Too many rules make it hard to see the future of the mining industry
Critics point to the most recent changes to the Mining Charter, which were made by Gwede Mantashe, the Minister of Mineral Resources and Energy. These changes increase BEE ownership quotas and community obligations. Mantashe says that the changes “fix past wrongs” and make sure that wealth is shared fairly. However, smaller businesses say that the costs of compliance are too high.
Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union, said that communities have waited too long for real benefits. He said, “Companies will keep taking advantage of workers and leaving communities if there aren’t strict rules.”
Also, Rand Merchant Bank analysts say that South Africa’s position in the Fraser Institute’s mining attractiveness index keeps going down, which makes investors even more worried about how unstable the rules are.
Calls for balance in how resources are managed
Environmentalists also say that the rules need to be stricter. Makoma Lekalakala of Earthlife Africa said, “For decades, communities have paid the price for mining.” “Regulation is the only way to protect people from being taken advantage of.”
But experts in the field, like Professor David Kaplan from the University of Cape Town, say the real challenge is finding balance. He said, “The state must protect communities, but it also needs to make sure they can compete.”
The fight between the government, miners, and activists is getting worse, and the outcome will decide whether South Africa can stay a global mining powerhouse or lose ground to new competitors in Africa.
