Monday, 29 November 2021 12:02 GMT

Mining industry eager for S.African leadership change


(MENAFN- AFP)Renewed optimism about South Africa's mining future coursed through the industry this week, focused on hopes of pro-business reforms under the ruling party's new leadership.

The world's largest mining investment conference started in Cape Town on Monday, as the ANC party met to discuss whether President Jacob Zuma could soon be replaced by his deputy Cyril Ramaphosa.

Ramaphosa, a wealthy former mining executive, recently took over as head of the African National Congress from Zuma.

"For the first time, it's possible to look forward with reasonable hope rather than a sense of foreboding," Roger Baxter, CEO of the South African Chamber of Mines, said as the "Mining Indaba" conference opened.

More than 460,000 people are employed in South Africa's mining industry.

But an impasse between government and business over key legislation has stalled the industry, while an ongoing corruption scandal surrounding President Zuma has scared off investors.

The election in December of Ramaphosa to lead the ANC was cause for "a new sense of hope", said Baxter.

"There's a positive wind of change blowing," he said.

South Africa suffered two ratings downgrades last year, while relations between the industry and the government collapsed in a stand-off over the mining charter, a guiding document to transform the racial ownership of the sector.

A new version of the charter was introduced in June, but all sides say they were not adequately consulted in the drafting process.

- Industry tensions -

Last year, the Chamber of Mines said it had lost confidence in Zuma's mineral resources minister Mosebenzi Zwane, adding that the charter "would destroy the industry" if fully implemented.

An application to have the charter set aside will be argued in court later this month.

Zwane has also been implicated in the wide-ranging "state capture" corruption scandal currently rocking South African politics.

Before Ramaphosa took over the ANC, the mining outlook was "subdued," Peter Leon, mining analyst and co-chair of legal firm Herbert Smith Freeholds' Africa Group, told AFP.

"Global investors with an interest in South Africa really adopted a wait-and-see attitude until after the ANC's elective conference," he said.

"Ramaphosa's a very effective communicator and he's making all the right noises."

The reaction to Ramaphosa becoming ANC president -- defeating Zuma's former wife Nkosazana Dlamini-Zuma -- was immediate, with the rand strengthening against the US dollar.

"There's no question that the sentiment towards South Africa has improved considerably," explained Bureau for Economic Research senior economist Hugo Pienaar.

- Tainted by Marikana -

A trade unionist-turned-tycoon, Ramaphosa is seen by many as crossing the often-fraught boundaries between business, government and labour.

He founded the National Union of Mineworkers in the 1980s, building it into the largest and most powerful union in the country.

But as a non-executive director at platinum mining house Lonmin, he infamously called for "concomitant action" against strikers at Marikana in 2012, days before 34 miners were shot dead by police.

Even though an inquiry into the massacre cleared him of responsibility, the incident is a major scar in his reputation and a key point of weakness identified by his political opponents.

At the World Economic Forum in Davos last month, Ramaphosa talked tough on corruption and worked hard to charm investors -- directly addressing the mining industry's troubles.

"The mining charter needs to be discussed thoroughly with key role players, so that we can find a solution to unlock the mining industry for South Africa," he was reported as saying.

"We do not want to miss out on the commodity boom that is unfolding."

Delegates at the Indaba in Cape Town have been following the latest manoeuvrings inside the ANC with interest, trying to assess when Ramaphosa will take over as president from Zuma.

Zuma must step down before the elections next year, but appears to be resisting severe pressure to resign immediately.

"There is a lot of friction around there being two centres of power," Old Mutual economist Tinyiko Ngwenya told AFP. "If Zuma does go, we're hoping it's soon."

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