[miningmx.com] — SOUTH Africa has become significantly less attractive as a mining investment destination since 2006, the SA Institute of Race Relations (SAIRR) said on Tuesday.
“Uncertainty over nationalisation and mine ownership, and increasing work disruptions are affecting investors’ willingness to get involved in mining ventures in South Africa,” SAIRR researcher Jonathan Snyman said in a statement.
In 2006, South Africa’s attraction for mining investment was ranked 37th out of 64 countries and territories, according to the latest SA Survey, published by the institute in Johannesburg this week. In 2010, this had dropped to 67th out of 79 countries and territories surveyed by the Canadian-based Fraser Institute.
“South Africa’s relatively low ranking is a result of perceived policy uncertainty in the eyes of potential investors. Factors such as uncertainty concerning the administration, interpretation, and enforcement of existing regulations are identified as one of the main deterrents to investment,” the SAIRR said.
Potential investors were also deterred by labour regulations, employment agreements, work disruptions, the reliability of the legal system, and uncertainty over disputed land claims.
“According to the data, factors influencing mining investment in South Africa’s favour are the availability of labour and skills, the quality of the country’s infrastructure, the quality of its geological database, and the state’s environmental regulations,” the institute said.
The mining sector in South Africa contributes 9.6% to GDP and employs 3.1% of the country’s labour force.
In 2010 the sector contributed 15.3% of country’s exports, according to the SAIRR.