THE South African junior mining sector is broken and is impossible to fix under current circumstances. That’s according to Paul Miller, MD of mining investment trust Concentrate Capital Partner (CCP), an investment fund.
In a hard-hitting speech to the Junior Indaba being held at the Country Club in Johannesburg, Miller cited three main reasons for his pessimistic assessment which included his opinion that the ANC government was fundamentally against free enterprise. The other reasons included the nature of “big mining” and “big labour” which – together with “big government” – have been charged with fixing the country’s mining sector.
Miller pointed out that big mining – as represented by the rebranded Chamber of Mines which is now the Minerals Council – represented the interests of sunk capital. “These are people who have money stuck in the ground and have already left. They have either sold down in South Africa or unbundled in South Africa, and even when they have unbundled in South Africa, they have gone and bought assets abroad.
“They are gone. They deny that they are not interested in the future of South African mining; they are being disingenuous.”
Turning to big labour, Miller said the unions were only interested in their members who were currently working for big mining and not “… people who might get a job in the future on a diamond digging site in the North West Province”.
Miller said junior mining was “fundamentally about free enterprise” and only succeeds when “… you have sanctity of contract; you have security of tenure; you have consistent regulation and you have high trust societies with low corruption. We have very few of those in our current environment. We are all very grateful we now have a minister (Gwede Mantashe) who is probably not a crook. But he probably is a socialist.
“Our big government is fundamentally and ideologically opposed to free enterprise. You cannot have people representing sunk capital arguing with people representing existing labour arguing with people who are fundamentally opposed to free enterprise and think that they can fix our junior mining sector.”
Miller added: “South Africa used to be the greatest mining jurisdiction in the world and this city used to host the greatest mining stock exchange in the world. We still have relatively good infrastructure; we still have great skills and we still have some of the greatest mining educational and training institutions in the world.
“We have all of that and yet you can count the number of successful junior miners on two sets of hands. That is pathetic. We should have hundreds of successful junior explorers and producers, not handfuls.”
