Gwede Mantashe, Minister of Mineral Resources and Energy, said, “South African captains of industry bad-mouthing the country” scares off foreign investors and tarnishes the country’s reputation.
Mantashe made these comments during the Minerals Council of South Africa’s review of the mining industry’s performance in 2022.
The Fraser Institute’s Annual Survey of Mining Companies for 2022 ranked South Africa among the bottom ten global mining jurisdictions.
The Institute also ranked South Africa 57th out of 62 countries in its Investment Attractiveness Index. In 2018, the country ranked 36, highlighting its precipitous decline.
In their latest trading updates, mining companies and their CEOs have been outspoken about the deteriorating operating environment which prevents them from investing in South Africa.
In its preliminary results, Glencore pointed to logistics and port constraints as the reasons for its limited chrome ore supply from South Africa.
Its coal profits were also limited by “continued rail constraints”, exacerbated by a two-week Transnet strike.
Exxaro’s coal production decreased by 11% in 2022 “due to the poor rail performance from Transnet” and the “structural constraint of inadequate electricity supply”.
Sasol attributed its declining output to South Africa’s deteriorating infrastructure and the “structural constraint” of load-shedding.
“Persistent load-shedding, infrastructure constraints, in particular, the poor performance of the national provider of rail and port logistics services…continue to significantly impact our business,” it said.
Sibanye-Stillwater said recently that the “increasingly supportive environment in Europe is in stark contrast to the operating environment in South Africa, which has continued to regress.”
Sibanye has previously stated it did not see significant growth for the company in South Africa and labelled the country as too risky to invest in.
Government is not to blame
Mantashe, however, disagreed with the mining companies saying that the lack of investment in South Africa’s mining sector was down to the companies themselves.
Citing the Fraser Institute’s rankings, Mantashe said South Africa’s poor ranking was due to “South African captains of industry bad-mouthing the country”.
Mantashe said that CEOs of foreign mining companies from Canada and Australia promote operating in their countries globally. “I do not have a sense of that here in South Africa”.
“We are half-hearted about it”, said Mantashe, “It is your sector, not my sector”.
However, the minister did admit that the severity of load-shedding and South Africa’s dysfunctional rail network have contributed to the country losing its attractiveness as an investment destination.
Mining companies are estimated to have lost R150 billion in revenue from Transnet’s inefficiencies alone, with many turning to trucking material to ports outside of the country.
He urged mining companies to participate in solving the energy crisis and not be mere spectators, waiting to complain when things are not fixed.
It is not the first time Mantashe blamed mining bosses for the dismal state of the industry.
In 2018, Mantashe lectured mining executives about the importance of being good ambassadors when they spoke about South Africa.
“If you badmouth the country, you are destroying your own investments,” he told the mining industry.