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Stable policies could add $8 billion capex to South African mines sector
CAPE TOWN, Aug 30 (Reuters) - Policy and regulatory
certainty in South Africa could potentially add 122 billion rand
($8 billion) in capital expenditure to the struggling mining
sector over the next four years, the Minerals Council's chief
executive said on Thursday.
The mining industry in Africa's most industrialised economy
is facing a wave of job cuts due to low global commodity demand,
high wage costs and a volatile labour environment.
The sector is waiting for the latest version of the Mining
Charter which contains regulations meant to redress imbalances
of the nation’s past apartheid rule and stipulates rules for
miners. The new rules could mean significantly higher taxes and
levies on mining companies.
Uncertainty around the charter has deterred investment into
a sector that accounts for 8 percent of gross domestic product
in the world’s top platinum producer.
"The current mining capex for the next four years for South
Africa is 145 billion rand. Potential new capital expenditure
under a more certain and conducive environment would add a
further 122 billion rand to this," the Minerals Council's CEO
Roger Baxter said in a speech.
Baxter was addressing a mining conference in Australia,
where he said South Africa had not reached its full mining
potential over the past decade.
He said modelling at the Minerals Council showed that if
South Africa returned into the top 25 percent of favoured mining
destinations globally it would create an extra 200,000 jobs.
Earlier this month, mines minister Gwede Mantashe criticised
Gold Fields' plans to cut jobs and reduce costs in
South Africa as taking the "easy way out".
($1 = 14.6777 rand)
(Reporting by Wendell Roelf
Editing by James Macharia)
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