Mbazima urges immediate dialogue on rail, port expansion – Creamer Media’s Mining Weekly

CAPE TOWN (miningweekly.com) – South Africa’s ability to revitalise crucial infrastructure, especially rail and port networks, is among the key actions needed to bring investment back into the South African mining industry, Anglo American South Africa deputy chairperson Norman Mbazima said on Monday.

Speaking on the first day of the Investing in African Mining Indaba, in which Creamer Media’s Mining Weekly Online is taking part, Mbazima said that South Africa’s iron-ore, coal and manganese were mined inland and required railing to ports, but that he had not seen any significant expansion of the rail and port infrastructure in the 15 years that he had been involved with the mining industry.

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“For the mining industry to grow, we need to urgently expand our rail and port networks, he said in pointing out that most of the world’s large infrastructure projects had taken place when governments had taken the risk of investing in infrastructure to encourage investment, or when governments had put in regulations allowing the private sector to do so.

Increasingly, there were moves towards public-private partnerships as an enabler for infrastructure development.

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Many of South Africa’s competitors in countries with mines closer to the sea and geographically located closer to customers, were at a competitive advantage.

“I would therefore urge immediate dialogue to work out how best to ensure that we adequately invest in our rail and port infrastructure so as to facilitate the growth and competitiveness of our mining industry,” Mbazima said.

Management teams had to go to their investment communities to justify why such investment was appropriate, including compared to alternative investment options elsewhere and that the project would be able to meet al the costs that were legitimately required to be borne before a profit could be returned.

Equally important was the certainty of consistent and clear mining policy, stable and functioning government institutions and efficient regulatory processes.

“Thankfully, commodity prices have picked up recently, but they are not quite there yet,” he said.

Regulatory authorities should put themselves into the shoes of the boards of mining companies that were required to take multi-decade decisions.

“It’s tough, and we have to compete for limited capital. Unless investors can see that all of us have confidence in our economy, democracy and our institutions, they will take their money elsewhere. We have to go out there and talk about our investment climate – how and why it is a welcoming one for investors,” he said.

An important part of encouraging foreign and direct investment is the hearing of aligned voices from government, business and labour, as was the case a few weeks ago in Davos, Switzerland, at the World Economic Forum.

He said there was no better place than South Africa to show the commitment of Anglo American to investment, which included a $2-billion investment to go underground at the Venetia diamond mine, in Limpopo, through De Beers.

Anglo American’s commitment to transformation was also characterised by the spinoffs out of the company of black-controlled South African companies like Exxaro, African Rainbow Minerals, Royal Bafokeng Platinum, and Shanduka.

He emphasise that a stabilising political environment, regulations that encouraged investment, the ramping-up of investment in rail and port infrastructure and understanding the importance of financial returns would bring investment back into South Africa’s mining industry.

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