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Easier to invest in rest of Africa than SA – Frank Holmes, CIO US Global Investors

In an interview on ClassicFM @ 18:00 on Wednesday, 8 February 2006

[miningmx.com] -- FRANK Holmes, CIO US Global Investors has said that it is easier for resources companies to do business in the rest of Africa than in South Africa.

Holmes was speaking on Classic FM’s week nightly business show, Classic Business Day.
BEE will be a stepping stone towards Mugabeism
“One of the things we’ve noticed is that the African mineral producers in the rest of Africa today have a greater market capitalisation than Harmony and Goldfields,” he said. “Why is there a discrepancy in the valuations?”

Holmes voiced concerns over SA’s Black Economic Empowerment (BEE) regulations. “North American Investors in SA going through that process are getting a lower valuation than countries in the Congo and Ghana,” he said. “It’s much easier for companies to invest in Mali than it is in SA.”

Holmes also expressed concerns over SA’s position on the political troubles in Zimbabwe.

“In America if you’re witness to a crime and you do nothing about it you can be charged for aiding and abetting that crime. What Mugabe is doing to his own people and white farmers is a crime and SA is doing nothing about it.”

Holmes said investors were worried that the BEE criteria would grow over time.

“They’re worried that BEE will be a stepping stone towards 'Mugabeism'.”