SOUTH Africa’s mining industry was in a dangerous phase and the changes to mining laws the government was proposing were coming on top of a backlog of unissued mining rights and a tough operating environment, Randgold Resources CEO Mark Bristow said on Wednesday.
Mr Bristow is the chairman of Rockwell Diamonds, a company operating in South Africa, as well as the head of Randgold, which operates mines in West Africa and is building a mine in the Democratic Republic of Congo, making him well placed to compare the South African mining environment to that elsewhere in Africa.
Randgold has mines in Mali, Cote d’Ivoire and Senegal and the Kibali project it shares with AngloGold Ashanti in the Congo.
Mali and Cote d’Ivoire have been subject to low-grade wars, but London-listed Randgold refuses to invest in South Africa, where Mr Bristow grew up.
The governing African National Congress said after its Mangaung policy conference in December that the state must "capture an equitable share of mineral resource rents through the tax system", sparking alarm in the mining sector, which is struggling under above-inflation electricity and labour-cost increases.
"What we are seeing in South Africa is a very dangerous trend in my mind because they are harvesting the industry. If you only reap and you don’t sow, you’re toast," Mr Bristow said on the sidelines of the Mining Indaba.
The government’s focus on increasing revenue from the mining sector means there will be less for companies to reinvest in their businesses for expansion, which cripples the industry, he said. "We’ll not invest here. It’s a mature destination for gold mining. We have fundamental filters: the right to mine, reliability of legislation and policy, recognition of the importance of the investment — all those things don’t happen here," he said.
"One of the things I cannot fault the governments of the countries in which we operate is the commitment to engage in the best interests of advancing the country’s own progress. The minister makes himself available to investors in these countries," Mr Bristow said.
"Here, you can’t get permissions, permits or responses, you can’t even get an audience. Sure, the mining industry is bigger and more complex, but it shouldn’t be like that," he said, stressing the need for partnership between mining companies, governments and labour, something that had broken down in South Africa.
The Kibali project is on track to begin pouring gold by the year-end, with the mills for the plant being installed. The relocation plan to move villagers off the mine site was almost complete and should be in effect by the middle of the year, Mr Bristow said.