LOCAL institutional investors have a bigger role to play in South
Africa’s junior mining industry through channelling a portion of their
funds towards the sector, the chairman of US-based mining contractor
Pangea, Rob Still, said on Tuesday.
Mr Still was speaking at the
inaugural Junior Mining Conference, held in Johannesburg, where leaders
from the industry met to debate challenges facing the sector.
While
South Africa has one of the largest proven resources and reserves, the
local mining industry has been criticised for lack of creative ways of
increasing productivity and attracting investment, and it has missed out
on the commodities boom in the past decade.
The conference also discussed ways of attracting long-term investments for sustainable growth of the industry.
The
aim is to turn South Africa into a prime mine listing destination, said
Noah Greenhill, head of corporate finance at Sasfin Capital.
Mr
Greenhill said despite South Africa having one of the world’s largest
mineral resources, there are only 80 mining companies trading on the
JSE, compared with the 180 miners listed on the Toronto Stock Exchange
(TSX) in Canada.
"The travesty is that there are more companies
that have operations in Africa listed on the TSX than those in listed
Africa," he said.
Policy uncertainty, low productivity levels and
skills shortage are among the main issues highlighted as having stifled
growth of the local industry. Increased and improved labour productivity
was key to realising better growth in the sector, Justin Froneman from
Standard Bank Group Securities said.
Although prices for
commodities such as gold and platinum have been rising in the past
decade, employment levels in both sectors have lagged behind.
According
to Peter Major, a mining specialist at investment manager Cadiz,
employment in gold mining dropped from 500,000 in 1990, to a workforce
of just more than 150,000 this year.
Recent events at Marikana,
where 34 mineworkers were shot dead by the police, highlighted the
failures of government policies, said Peter Leon, the partner and head
for Africa mining and energy projects at Webber Wentzel.
He said the mining charter also failed to address socioeconomic inequalities as well as broad-based black economic empowerment.
The
major failure of the mining charter itself was the allocation of equity
to a few politically connected consortiums and individuals in exchange
for mining rights, he said. The industry needed to employ a more
holistic approach to the socio-economic inequalities, and communities
also should be allocated mining rights. Mining industry leaders also
looked into the challenges that had an effect on creating a fertile
environment for the survival of smaller companies.
Source: http://www.bdlive.co.za
Junior miners ‘need more investor support’
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