Patrice Motsepe
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Southern Africa’s economic future lies in the creation by governments of exciting legislative, regulatory and fiscal empowerment that stimulates private sector investment.
That is the view of Patrice Motsepe, executive chairperson of South Africa’s black-controlled African Rainbow Minerals (ARM) mining company, who addressed the broad economic regional imperatives ahead of ARM’s latest interim results presentation attended by Creamer Media’s Mining Weekly Online.
“The primary obligation of government is to empower the private sector,” he said in outlining how it had been shown worldwide that, if given the right legislative, regulatory and fiscal environment, it was the private sector that created wealth and jobs and which delivered the taxes for education and social development.
He said in outlining ARM’s 56% drop in half-year headline earning to R1-billion that private sector companies were making tens of billions of dollars for the pension funds and provident funds of tens of millions of ordinary citizens.
What it needed in exchange was the opportunity to create wealth consistently, with the least amount of uncertainty.
“It’s important that we keep building trust,” he said, adding that he was convinced of the South African government’s understanding of the need for legislative, regulatory and fiscal certainty.
Elsewhere in the Southern African region and on the continent good opportunities were opening up during the current intensely difficult economic period, but these opportunities could not be taken up when governments suddenly moved the legislative and fiscal goalposts.
“This is the time when we should be working together,” he urged, adding that it was in these tough times that mining companies were forced to commit to low-cost, lean operational behaviour with high productivity.
He urged governments to set rules that were good for governments and mining companies, which were under considerable strain from low commodity prices.
“I’m confident that we’ll do well in South Africa and the region,” he said in outlining that from 2005 to 2010 ARM had invested more than R50-billion together with its high-ranking partners, which include some of the biggest names in mining like Glencore, Anglo American Platinum, Impala Platinum (Implats), Vale, Norilsk and Assore.
Motsepe expressed excitement at ARM’s latest R400-million investment with Implats at the low-cost Two Rivers platinum asset on the eastern limb of the rich Bushveld Complex.
“It’s one of those platinum mines that excites us immensely because it reflects the future of platinum from an ARM perspective but also the future of the mining industry, where there is a huge focus on mechanisation.
“We’ve got a huge obligation to labour and job creation, but the issue of mechanisation and the performance of Two Rivers has really excited all of us,” Motsepe said.
ARM's acquisition of the Tamboti platinum mining right puts an additional three decades on its expected involvement at Two Rivers through the addition of portions of the Buffelshoek, Kalkfontein and Tweefontein farms into the Two Rivers mining area.
This is in line with ARM’s strategy of reducing its historic heavy dependence on iron-ore and manganese by being involved in platinum and copper growth alongside its ferrous interests.
ARM’s equity in Two Rivers is expected to increase beyond 51% as a result of the Tamboti transaction.