[miningmx.com] – REGULATORY change in the mining industry was not restricted to South Africa where the country’s government has been heavily criticised by investors for negatively influencing the investment mood and introducing uncertainty.
Announcing the publication of his company’s annual mining publication ‘Tracking the Trends’, Deloitte mining industry leader, Abrie Olivier, also said he detected “a large amount of goodwill” in relations between the mining sector and government officials, especially in South Africa.
This was despite another year in which the private and public sector have locked horns over a number of issues ranging from amendments to mining, and health and safety legislation, to government inefficiency in assessing prospecting and mining right applications, as well as labour and union strife.
Said Olivier: “Notwithstanding the critical labour issues in South Africa, there is a fair amount of goodwill”.
Deloitte had recently facilitated a Progressive Business Forum between ANC stalwart Enoch Godongwana’s Economic Transformation Committee and industry leaders. The auditing and consulting firm is expected to publish more details on the meeting before the year-end.
“What came out of the meeting is to get to a granular level. There was a real and genuine need to move towards that,” said Olivier when asked if the forum had tackled problems such as ministerial discretion over declaring certain minerals ‘strategic’, a development that would allow government to potentially set export quotas on steel feed minerals such as coal and iron ore.
One of ten trends identified this year by Deloitte was that relations between governments and the mining sector had been typified by hostility. “I believe there is a willingness to make things work,” said Olivier. Policy development clusters and initiatives aimed at improving infrastructure that served mining were examples.
“It’s not just a South African government trend; it is a global issue,” said Olivier citing examples where mining had been halted by government diktat in Chile and Canada.
The troubled relationship between the South African government and its mining industry was captured at the Jo’burg Indaba conference in September when Godongwana said: “There is too much of a trust deficit between the parties [government and industry] of which some is historical, which has go to do with the past”.
Amendments to the Minerals and Petroleum Resources Development Act (MPRDA) and the Mine Health and Safety Act have provided a platform for the discussion with government critics, mostly legal firms speaking on behalf of anonymous clients, saying the proposed legislation gives too much discretion to the mines ministry.
More recently, the mining industry – Mark Cutifani, CEO of Anglo American, and Glencore Xstrata coal marketing executive Clinton Ephron – have expressed confidence that the controversial MPRDA amendments could be resolved amicably.
For Deloitte’s Olivier, an important means of capturing improvements in government relations was the extent to which mining legislation and regulations cohere with the National Development Plan (NDP). “There is no silver bullet that can align the NDP with the MPRDA and certainly there have been pockets of misalignment,” he said.
However, the recently re-drafted Integrated Resource Plan, a 20-year blueprint of how South Africa’s power mix can be balanced, belatedly takes on NDP suggestions about the costliness of nuclear power saying it could be too expensive, and should be implemented cautiously given the changing nature (downwards) of South Africa’s economic growth rate.
Among other trends identified by Deloitte in its report were the decline in mining productivity, the increased interplay between communities and mining companies, the difficulties faced by junior miners as the capital markets adapted to lower metals demand, and the seemingly counter-intuitive increase in resource nationalism.
