Live from the Mining Indaba: Patrick Cairns – Moneyweb

People are willing to take a very long-term view on mining.

HANNA BARRY: Well, the Mining Indaba, the world’s largest annual gathering of some of the most influential stakeholders in mining, kicked off this morning in Cape Town. Is the event still relevant? There have been some questions surrounding that.
   We are trying to get Moneyweb journalist Patrick Cairns, who was at the Indaba today, on the line. We can’t find him yet, so we are going to keep chatting to Maudi Lentsoane.
   Maudi, I’m not sure if you want to jump in on the Mining Indaba, or how much you’ve been following it. But, in your perspective, is it still a relevant event?

MAUDI LENTSOANE: There are a number of questions, I think, raised on that it’s a talk shop where people just come in and meet. I actually think it’s still very valid, very, very important forum for the mining sector to really come in and present their case, particularly in the time when we virtually had the sector being so depressed for a very long time. And I think with the National Development Plan that’s also something to be communicated and make sure that we sell the industry to the world and all these other participants that will be there. I think it’s a wonderful forum.

HANNA BARRY: Peter Major, the mining specialist at Cadiz Corporate Solutions, said exactly that – that South Africa now more than ever has got to sell our country as an investment destination for miners. I’m not sure how well we are doing that.
   But to tell us how well we might be doing that is Patrick Cairns, whom we now have on the line.
   Patrick, I’m going to dive straight in as we are pressed for time. What are investors looking at in the mining sector in South Africa and on the continent?

PATRICK CAIRNS: Well, Hanna, I think in the South African context what they are looking for in a word is certainty. Over the last few years all that we’ve had in South Africa is a lot of questions and not that many answers. And that covers a lot of things, from the BEE code to the questions of legislation with regard to are you empowered once for all or do you have to keep being empowered? And that’s a big question mark for investors. If you are asking somebody to give away 26% of their company, they need to know what kind of return they can expect. And if you are going to say just because you’ve done it once it’s not good enough – you’ve got to keep doing it, that raises a lot of questions.
   Also we are looking at an industry that has some complications in terms of the worries that exploration companies are encouraged to come – and whether or not there are any incentives for people to come and explore and try and develop new projects in South Africa. There’s a feeling that the government has looked at the mining industry and said well, there is a lot of capital that is already invested in South Africa and that money is caught in a cycle and so it’s not really going anywhere, it’s self-sustaining in a sense, and do we really to encourage new people to come in. And so there’s a feeling that perhaps junior miners are being ignored or even neglected. And that’s also something that needs to be looked at … for those smaller companies to come and take advantage of … the huge resources that we have in this country.

HANNA BARRY: So quite a few important topics on the agenda. Patrick, we are running out time, but quickly, from your perspective, sentiment on the ground – is this still a prestigious, important premier event for the mining industry?

PATRICK CAIRNS: Very much so. It’s a huge event. Several private investors are there at the Convention Centre, we are told, and deals are being made on every corner. At every booth that you are pass you hear people talking about some big money changing hands. So I think definitely a sense of things getting done here, and still a lot of excitement in the potential for mining, even though we are in a commodity-bust cycle. I think people are taking a longer-term view of things, that there is still a lot of potential on the continent and even in South Africa. People are willing to take a very long-term view and saying the resource here is still so exceptional that we think it’s still worth looking at.

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