South Africa needed to convene a “Codesa 3 or something similar” on its mining industry, said Group Five CEO Mike Upton on Wednesday. “We are not finding each other.”
Codesa 1 and 2 refer to the Convention for a Democratic South Africa, which saw the country in the early 1990s negotiate its way to the establishment of a new, democratic order.
Speaking to Engineering News Online following the announcement of the construction company’s interim financial results in Johannesburg, Upton said Group Five was currently only doing work for Kumba Iron Ore and Xstrata.
“That’s it. It’s too small for us.”
South Africa’s construction industry had a long history of providing for the local mining sector’s often large-scale capital expenditure (capex) requirements.
Upton said South Africa was losing investment in its mining industry, which was continuously clouded by talk of nationalisation. The recent spate of violent strikes had “also made investors pull back”.
He added that mining companies also had to fulfill their responsibilities in terms of “their social mandate”.
“We need perspective. We need to get our act together. We are losing out on a lot of capex that would otherwise be spent here.”
Announcing Group Five’s results for the six months ended December 31, Upton reported that the company had returned to profit in the fist half of the 2013 financial year, recording a net income of R147-million for the six months ended December 31, 2012. This followed a net loss of R230-million for the previous full financial year, following on from a loss of R159-million in the 2011 financial year.
Upton said it was “nice to present a better set of results”.
He noted that the two aspects that “dragged on” Group Five’s results – legacy projects in the Middle East and India, as well as a loss-making construction materials division – “were essentially behind us now”.
While certain sectors of the construction industry were showing signs of recovery following a number of tough years, Upton said the South African mining sector was “extremely weak” and “very quiet” for local construction firms shopping for work, except for coal and iron-ore operations.