Firstly, a Happy New year to everybody. And a prosperous one. After all, only through prosperity can we retain existing jobs and create new ones. Obviously, the world did not end, as some feared (hoped?) on December 21, the day the calendar of the Mayan civilisation ended. Now, I must confess to be puzzled as to how anybody could possibly have believed that the Mayans could have been able to foresee the end of the world. Although sophisticated and impressive, the Mayan civilisation was fundamentally a Stone Age culture: that is, it had no metal tools.
Of course, and sadly, for all too many people in the Rustenburg area, it does look like an apocalypse is about to happen, with Anglo American Platinum’s (Amplats’) radical plans to sell some shafts, put others on care and maintenance, suspend processing plants and lay off thousands of workers in an attempt to restore health to an ailing business. This is sad news. I’ve been retrenched myself, and it is not fun. But the company seems to have had little choice in the matter. (For detailed coverage of the situation, go to our sister publications, Mining Weekly and Mining Weekly Online).
However, what is really depressing is the reaction of government and of the ruling African National Congress (ANC). Faced by a major crisis in the mining sector, their reaction has been to inflict yet more damage upon it.
Mineral Resources Minister Susan Shabangu asserted that “[we] regard this as unilateral, but also as a company that disrespected the regulator in the way they have made their own decision”. Shock! Horror! A company made its own decision! Amplats was, of course, merely exercising its rights. South Africa is meant to be a democracy, isn’t it? That means the individuals, associations and private-sector companies are independent of government control. How are possible foreign investors likely to view this? Probably not favourably.
ANC spokesperson Jackson Mthembu loosed a blast of paranoia. “This decision is cynical and dangerous in the extreme. This decision is part of a strategy to divest [Amplats’] business from South Africa and relegate the mines in South Africa to ‘dogs’. We call on the Minister of Minerals and Energy to call an urgent meeting of the industry with a view to considering the idea that companies who want to mothball shafts surrender their licences in respect of those shafts so that they can be put on public auction for new owners who are still hungry to mine to put them to good use.”
Amplats is, of course, trying to save its business in South Africa. Shafts are being mothballed to cut platinum production and so drive up the price. Giving them to others to mine would keep the price down and continue the local industry’s agony.
Such appalling displays of eco- nomic ignorance, such blatant hostility to business, will only have damaged this country in the eyes of foreign investors. (It’s no good saying that ANC statements are not government policy: the ANC is the ruling party, and, all over the world, ruling party pronouncements become, in due course, government policies. That’s the way it works. That’s the way it’s meant to work.)
That Amplats is in serious trouble has been known for a couple of years now. What concrete steps did government take to help?
In Brazil – South Africa’s partner in the Ibsa (India, Brazil, South Africa) and Brics (Brazil, Russia, India, China, South Africa) groups – when confronted with equivalent problems in key economic sectors in recent years, government has reacted by, for example, cutting taxes, including taxes on inputs, for those sectors in order to reduce their costs and so make them more competitive. Did the South African government cut, say, value-added tax on Amplats’ huge electricity bills?
As far as can be seen, all Pretoria did was to set up talk shops while providing no concrete assistance. Now, when the company exercises its rights in a demo- cratic society to restructure itself in an attempt to save itself (and thus save tens of thousands of jobs), government and the ANC unleash an antibusiness tirade that only further damages international confidence in the country’s mining sector. As the Americans say, go figure.