[miningmx.com] – MINES minister Ngoako Ramatlhodi’s idea of a national mining champion is a workable one and could well fit in with the divestment of big multinational companies, said Peter Attard Montalto, senior emerging markets economist and specialist on South Africa for Nomura International.
Montalto, who was a delegate to the World Economic Forum on Africa, was the guest speaker at a Cape Town Press Club event on June 5.
Asked about the state of the mining industry amid uncertainty about legislation and black economic empowerment credentials, Montalto was fairly upbeat about the extractive sector and said “interesting times lie ahead’.
“The good thing about Ramatlhodi is that we know exactly what he wants. Towards the end we were not so sure what (former mines minister) Susan Shabangu wanted,” said Montalto. “With Ramatlhodi we know that he wants to construct a national mining champion and we know multinationals are interested in divesting in South Africa.’
Montalto believes there’s a way of reconciling the creation of a national mining champion and divestment by involving various sectors or state entities, such as the Public Investment Corporation, the state mining company, and black capital.
“The real question, however, is can you have a company that is vastly majority black managed? There is by all means the talent to do that, but the problem is do you want to aggregate it into one company? I think that’s where the mines minister needs to do a lot more work.’
As for the South African economy, Montalto believes the country was in a state of grinding under-performance, citing the low job creation numbers and sluggish economic growth as some of the reasons.
He also criticised the government’s “love of task teams’ to address problems. “[A] 3% [growth rate] is the speed limit in South Africa,’ he said, “and then things that are dragging South Africa down such as regulatory uncertainty and labour laws.’
South Africa does have the potential to grow at 5% to 6% annually, provided that there are policy changes, such as a scalable free market solution.
“Take Eskom, for example. Government knows what to do and the war room is really just a detour to keep various people happy.’
The non-implementation of the National Development Plan (NDP) creates a significant policy vacuum.
“Why hasn’t the NDP been adopted wholesale? It seems individual ministries can decide what they want to do without fundamentally committing to it and the NDP therefore doesn’t exist as a coherent government policy.’
