It may be early days still but it appears the dawn of a new era in South Africa’s politics has brought back much needed confidence in South Africa’s mining sector, barely a week after the resignation of the country’s president Jacob Zuma. Zuma’s reign was marred by allegations of state-sanctioned corruption, policy uncertainty and ineptitude of public institutions.
Coming out of the blocks fast like a determined Olympic sprinter, the first thing the new President, Cyril Ramaphosa, has done is mending the rift between government and mining companies, by suspending the contentious revised Mining Charter. Unilaterally, he government crafted the Mining Charter without consulting mining companies and others with vested.
In a paradigm shift of position, a statement from the Presidency released on Sunday, said: “The presidency has been in discussion with the Chamber of Mines to resolve the impasse over the Mining Charter and to facilitate a process of developing a new Mining Charter that all stakeholders can support and defend. The postponement serves to allow parties the space to engage and find an amicable solution.”
In response, the Chamber of Mines, which had taken the government, specifically the Department of Mineral Resources, to court, has suspended its legal proceedings.
Commenting on behalf of his organisation, the President of the Chamber of Mines, Mxolisi Mgojo, commented: “We welcome the president’s intervention, and his commitment to engaging meaningfully with stakeholders in the industry – and others – on a New Mining Charter.”
In a statement, the Chambers of Mines said it recognised “the need to rebuild trust, to engage broadly and in good faith, and to work collaboratively to get South African mining back on track”.
The Chamber of Mines has hailed Ramaphosa for recognising that the mining industry can be an effective to transform South Africa, in addition to the emphasis on innovation and digital revolution as the sector’s future.
Excitement countrywide is palpable. A number of stakeholders have given the new president their thumps up, likening the mood to the honeymoon of the Mandela era.
But what should be more uplifting is the glowing observation from rating agency Moody’s Investor Service, which downgraded South Africa a notch just above junk status last year. The organisation said in a statement: South Africa’s new leadership headed by newly-elected President, Cyril Ramaphosa, is a ‘credit positive’ for many of the country’s top gold and platinum miners, said ratings agency, Moody’s Investors Service.
Moody’s added that a resolution of issues around the country’s revised mining charter and finalisation of MRPDA (Mineral and Petroleum Resources Development Act) amendment bill would be credit positive for Anglogold Ashanti (baa3 positive), Gold Fields (ba1 positive) and Sibanye Gold (ba2 stable).
When all is said and done, the jury is still out on whether Ramaphosa will push through his agenda. There is always fear that, with 2019 elections around the corner, populist elements within constituents might distract him from implementing what he has set out to achieve.