By Lehlohonolo Lehana.
The Fraser Institute’s latest “Annual Survey of Mining Companies”, has ranked South Africa as one of the world’s 10 worst countries for mining investment, for the second year in a row.
Canadian think-tank’s comprehensive report ranks 62 mining jurisdictions based on their geological attractiveness (minerals and metals) and government policies that regulate and administer mining activities.
The 2022 survey was distributed to 1,966 managers and executives around the world who work in companies involved in mining exploration, development and other related activities.
Its policy perception index, which measures the attractiveness of state mining policies, placed South Africa at 53 out of 62 jurisdictions last year. The country scored 44.76 in the attractiveness index, down from 65.30 in 2018. This, however, is a slight improvement from 2021 when South Africa scored 37.88.
In a statement the Democratic Alliance(DA) says, the African National Congress (ANC) stubborn adherence to a suite of losing policies, from transformation to BEE and localization have ensured the worsening of the prospects for the industry.
“South Africa is not short of good examples. Neighbouring Botswana is in the top ten of attractive destinations for mining investment. They are on our borders but their mining policy is light years away from the ANC’s cronyist and statist model.”
The ANC’s inability to learn from experience or example will ensure that our mining will remain crippled, read the statement.”
The official oppoistion party added, “that the for the last ten years the DA has warned about the consequences of BEE and a corrupt, incompetent, and secretive licensing process. Each time ANC ministers, more latterly Gwede Mantashe have dismissed these concerns. Yet all Mantashe’s boasts about improved performance have resulted in failure.”
After he was appointed in 2018, Mantashe said it would be a priority to raise South Africa’s place in the Fraser rankings. Instead, the country’s rating has fallen and it continues to languish near the bottom.
Meanwhile the Minerals Council said it was concerned that South Africa remains poorly rated as a mining investment jurisdiction in the latest Fraser Institute Annual Survey of Mining Companies 2022.
In a statement, the group said in a survey released on Thursday, South Africa is, for the second consecutive year, ranked in the bottom ten global mining jurisdictions, placed 57 out of 62 in the overall Investment Attractiveness Index compared to last year’s position of 75 out of 84 jurisdictions. Last year was the first time the country ranked in the bottom ten.
The survey captures the mining industry’s perceptions of the investment potential of global mining jurisdictions based on mineral potential and government policies. The Fraser Institute uses 15 standard questions on policy factors, which are rated on a scale of one to five to determine whether they encourage or discourage investment in a mining jurisdiction. Governments can assess or validate the impact of their policies or use the survey to improve mining-related policies to attract more investment,” the council said.
According to the council, South Africa is ranked lowly in the Investment Attractiveness Index, which is weighted 60% by mineral potential and 40% by policy perceptions. In 2020 and 2019, South Africa ranked 60 out of 77 jurisdictions and 40 out of 76, respectively.
“In the Policy Perception Index, South Africa slipped to 53 out of 62, from 65 out of 84 jurisdictions the year before. In the Mineral Attractiveness Index, it ranked 41 out of 47 jurisdictions compared to 77 out of 84 a year earlier.
The survey noted South Africa slipped sharply in its policy score because of concerns about infrastructural constraints (electricity and rail) and the availability of skilled labour. Respondents flagged regulatory duplication and worries about the administration and enforcement of existing regulations to also be a deterrent to investment,” the Council said.
Minerals Council CEO Roger Baxter said the Minerals Council is due to meet the Department of Mineral Resources and Energy about the surveys and to engage on each of the 15 areas of the survey to address the underlying causes and propose potential solutions.
“It is disappointing that South Africa remains poorly perceived as a global mining jurisdiction, but there are fundamental problems in our country that need to be addressed. The Minerals Council continues to work with the DMRE, other government ministries, the Presidency and business organisations to create an investment-friendly environment to encourage sustainable, inclusive growth,”he said.