The biggest issues facing Africa& largest mining gathering – Indaba 2016
On Monday more than 7,000 delegates from 100 countries and territories across six continents will descend on Cape Town for the biggest mining gathering on the planet in one of arguably the toughest years in the history of African mining.
The continent is facing economic uncertainty, doubts over mining legislation and regulation, power cuts and looming strikes. Even the optimists, that is the government of South Africa, admit there could be as many as 32,000 jobs under threat in the country’s mines.
This would be a severe blow to an industry, that despite several setbacks in the last five years, is still top dog in Africa employing 400,000 people. Pay talks are expected in the platinum industry later this year, with the dominant union AMCU, that could lead to a strike costing billions and thousands of jobs. The union led a five-month strike in platinum two years ago.
AMCU will make its debut at this year’s indaba and is likely to arrive with characteristic uncompromising views on mining that could unsettle one or two foreign investors.
“We feel it is not ok for corporations to come into our country make decisions about what is happening in our country and then leave,” says Manzini Zungu, the spokesman for AMCU.
One of the highlights of this year’s gathering is that South Africa’s new mining minister Mosebenzi Zwane will open proceedings and give the mining world a hint of how his government plans to stem the flow of capital out.
For years a pall of gloom has formed over the Mining Indaba in Cape Town with analysts and industry insiders tutting about how pessimistic foreign investors are and how there are more supply companies and fewer mining companies every year.
“The problem is South Africa is sending out messages that it is closed for business,” one delegate and former mine boss said to me in Cape Town last year.
Infrastructure is also a worry. From Zambia to Mpumalanga mines are suffering power cuts and a lack of roads, water and rails.
On the other side of the coin, infrastructure, along with the support for new mining projects, is the focus of the Mining Indaba with the aim of prising billions out of foreign investors.
The organizers are upbeat even if the mining industry is not. They claim billions of dollars in investment have been channelled in to African mining, through the indaba, creating 5,000 jobs since 2007.It claims 2,300 international companies will have delegates at this year’s gathering.
The Johannesburg Stock Exchange, clearly caught up in the sustained enthusiasm of the organizers, will be there in force in the hope of recruiting new listings. Of the 391 companies listed on the JSE, 68 are from metals mining and resources. The fact that the JSE wants more, at the very least, is a vote of confidence for a very battered industry that has seen billions in value of resources companies wiped off the board in the last few years.
When the talking starts in Cape Town there are likely to be more than a few sparks. One of the first speakers on Monday will be the former Nigerian Reserve Bank governor Lamido Sanusi, the man whose unflinching stance against corruption and his own government in 2011 earned him Forbes Africa Person of the Year award. The Emir of Kano, who rarely minces his words, will speak as chairman of Black Rhino Group , an energy infrastructure company with investments across Africa.
Other vociferous mining bigwigs expected as speakers will be Ben Magara, the CEO of Lonmin, Mark Cutifani, the CEO of Anglo American, Tom Albanese, the head of Vendanta Group, Robert Friedland, the founder of Ivanhoe Resources and Mark Bristow, the CEO of Randgold Resources.
There will be plenty of talk at the Mining Indaba, in Cape Town’s vast International Trade Centre, but talk can be cheap. If mining is to remain a major industry on this continent serious investment and hard work is needed this year.
More than 20 years ago the Mining Indaba was launched in one room at a Cape Town hotel. The industry must be careful not to allow the industry to shrink back into one hotel room in 20 years’ time.
Credits: Chris Bishop, CNBCAfrica
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