South Africa’s mining industry is in “crisis” and its companies have lost confidence in the mining minister, whose sowing of policy uncertainty has led to a freeze on new investment, the chief executive of its Chamber of Mines said on Friday.
In a speech to a mining conference in Australia, Roger Baxter painted a bleak picture of the industry, saying two thirds of South Africa’s platinum sector had been loss-making this year.
“Policy and regulatory uncertainty have frozen new investment in the sector,” said Baxter.
“The industry does not believe that the approaches adopted by the department of mineral resources are serving the national interest of the country,” he said in the latest comments to highlight differences between government and industry on the best way to revive the struggling sector.
South Africa’s mining industry has been a major employer and contributed 7.7% to gross domestic product in 2016. The sector also accounts for 25% of exports in Africa’s most industrialised economy.
Mines Minister Mosebenzi Zwane has drawn criticism after announcing a new Mining Charter that increased the requirement for black ownership to 30% from 26%.
Zwane says the charter aims to widen ownership in South Africa’s economy, which has yet to shake off the legacy of white rule more than two decades after the end of apartheid.
The Chamber of Mines applied to the high court to prevent implementation of the charter, saying it risked “vast and systemic damage” to the industry. The industry body said there had been insufficient consultation drawing it up.
Addressing the same conference on Thursday, Zwane reiterated his commitment to the new policies.
Ratings firm Moody’s has warned that proposed plans by South Africa’s government to implement “radical economic transformation” could turn away investors.