When SA stops chasing away miners and tourists, we can talk of a new dawn
Conversations with a young miner and a tourist force a sobering view of SA’s key sectors, just when SA needs them most
I am currently, literally, an ocean away from the homeland doing my semi-annual gig lecturing on a modern, rather sumptuous cruise ship which has journeyed up the west coast of Africa and now approaches Mediterranean Europe.
Happily, the ship’s generator keeps it fully lit, so no load-shedding. But my role, along with some eminent Washington DC journalists, former US ambassadors and other luminaries, is to offer some wit and apparent wisdom to keep the well-heeled, well-informed passengers up to speed on current topics.
My offering on Brexit led me to a sad conclusion. Even the most established first-world democracy, housing the “Mother of all Parliaments”, can in the case of the current chaos coursing through the veins of Britain’s body politic, have chaotic consequences.
However, after having borrowed the rather witty putdown on the poor and soon to be exiting British PM that “for the first time in calendar history, the end of May will be before the end of April”, a thoughtful guest in the audience made a useful point. “What’s happening in Britain right now is terrible and shows a complete lack of foresight into consequences. But for all the division and almost universal scorn at home for the political classes, and even in the teeth of demonstrations and the like, there is no violence, no riots and no breakdown in law and order.”
I thought that a telling point. But it did not resonate nearly as close to home as two key responses which were made to me on board after my lecture on “South Africa in 2019”.
I tried to present a balanced account of this year at home, which could be dubbed “the year of living dangerously”. Having averted to all the challenges – from corruption and cronyism to electricity and energy and electoral uncertainties – I thought it apt to end on a positive note, or several of them.
The more obvious of these are the unique selling points, or the things that can’t be found elsewhere. The top two here are our specific tourist attractions and the mineral treasure trove beneath our soil.
The first and most emphatic response I received was from a fellow SA passenger, one of the very few aboard this ship largely populated by Americans who are on a world cruise, of which this segment from Cape Town to Monte Carlo is just one small sector.
He seemed to represent everything to which I had alerted the audience – how SA has produced a nation of entrepreneurs with a can-do spirit of frontier capitalism and emblematic of the spirit of resilience which had seen the nation through all manner of crises, from apartheid to day zero in Cape Town.
Bright, successful and forging an impressive series of ventures in the world of minerals, my interlocutor was what is termed a “junior miner”. He heads up one of the small but successful mining venture companies that operate on the margins in almost mined-out areas such as Mpumulanga and Limpopo and which have listings on secondary exchanges below the JSE.
But for all his surface bonhomie and can-do spirit, my new shipboard companion was filled with foreboding for our mining future. And he also asked whether in fact SA had any economic future of consequence if its mining sector collapses.
He led me through a raft of facts and figures, none of any comfort: in 1998, SA was producing 504 tons of gold from 65 producing mines. By 2017, we were down to 110 tons from just nine producing mines, a drop of more than 80% in two decades. Meanwhile, the vertiginous decline in employment is almost as steep. My junior miner companion now reckons that 2019 will be even worse, largely due to Eskom tariff hikes and power interruptions coupled with populist trade unions happy to close mines by pressing totally unrealistic labour demands.
Our gloomy discussion ended with his outrage at the latest mining charter which on his view is simply changing the rules of the game midway through the match. Or as he more graphically expressed the charter (intended to encourage foreign investment): “It is even worse for foreigners. Imagine coming to play an international rugby match and being told on arrival that we don’t play according to the IRB rules, we have our own and we will change them anyway.”
Actually, our conversation happened just days after Minerals Council SA announced it was taking the government to court for its “illegal and unconstitutional actions” in requiring mining companies, when renewing or transferring leases and rights, to up their BEE ownership from 26% to 30%, even in the face of having made original provision for BEE percentages according to the mandate set out in the legislation. Never mind, the government seems to be saying, we will just amend as we please via a unilateral charter.
In fact, as the junior miner points out, any worthwhile mining jurisdiction needs “investors who in turn need security of tenure and consistent rules for the life of the mine”.
Our shipboard conversation ended with his declaration that he and his company “have given up on South Africa for mining”.
I then asked where next for them? “Zimbabwe – they at least have learnt some painful lessons and you can now do business there.”
Before the shock had set in that Zimbabwe might be an easier place to do business than SA, at least by this miner’s lights, I had another conversation.
This was a seasoned American traveller who had listened carefully, he advised, to my punt on SA’s uniqueness. “I’m not that convinced”, he told me. Having announced how much he enjoyed the delights of Cape Town where he embarked, he added: “But getting there was hell.” He told me that he did not have two clear pages in his passport and was sent back home and $3,000 later for a new air ticket he arrived three days late. “Don’t you want tourists in your country?”
Now SA is not the only country to have this requirement, but we probably are the only one with less than 2% GDP growth and desperately in need of foreign investment and tourism.
But if the stuff we dig out of the ground and the unique tourism on offer is made hard to access and obstacles are strewn in the path of either investor and job creator and tourist, then this new dawn is already occluded.
But the pioneer of the new dawn can-do optimism, Cyril Ramaphosa, cheerily promised in his State of the Nation speech something both quite specific and tangible. He pledged that within three years, SA will move 32 places up the World Bank Ease of Doing Business from its lowly 82nd place ranking to number 50 by 2022.
But he has also promised truckloads of investors and no more blackouts as well. Oh, and an end to corruption, too. Meantime, let’s see if he can keep the mines open and the junior miners at home, the lights on after election day and the foreign tourists happy. Three places to start on a long journey.