JOHANNESBURG – President Cyril Ramaphosa yesterday moved to allay investor jitters in the mining industry, charging that expropriation of land without compensation would not involve taking away investors’ land and that the government was working on a clear plan to address problems that had besieged power utility Eskom.
Ramaphosa reiterated that the government's land reform programme would not be chaotic and would be done within the confines of the constitution.
“Investors need not fear that their assets will be taken away from them, and we must applaud mining companies that have said we have surplus land that can be used to build houses,” Ramaphosa told the Investing in African Mining Indaba held in Cape Town.
Ramaphosa, who became the country’s first sitting president to address the annual indaba, said the government had envisioned the expropriation of land without compensation as one of the measures to bring about land reform and redistribution.
He said the government was also working hard to address the security and affordability of energy supply which the industry had raised as an impediment to its survival.
Eskom has requested a 15 percent tariff hike over the next three years as it languishes under a R400 billion debt.
The industry has warned that the tariff hike would see 150 000 job losses across the industry with the platinum and gold sectors expected to shed the most jobs. Ramaphosa also appointed a task team to advise the government on actions to resolve Eskom's operational, structural and financial challenges.
Ramaphosa admitted that Eskom was currently facing significant operational, financial and structural challenges but assured the indaba that the government would be addressing them in the next few days.
“Eskom's contribution to the health of our economy is too great for it to be allowed to fail,” Ramaphosa said. “It's too important and is too big to fail. And we will not allow it to fail. Restoring and securing energy security for the country is an absolute imperative. In the coming days, we will be announcing a package of measures to stabilise and improve Eskom’s financial, operational and structural position and to ensure security of energy supply for the country.”
Ramaphosa said mining remained key to the country's economy. He said his government had invested time and resources in restoring the strained relations with the industry that characterised the era of former mineral resources minister Mosebenzi Zwane.
Zwane’s gazetting of a controversial mining charter in 2017 wiped R50bn off the market value of shares of listed mining companies on the day.
The gazetting of the charter widened the trust deficit with the Minerals Council South Africa, formerly known as the Chamber of Mines, approaching the court to have the mining charter reviewed and set aside.
“We have emerged from a period of strained relations where the courts became the main platform of engagement between industry and the government. We want to put that behind us,” he said. “We no longer want to meet you in court, we want to meet in your boardrooms and (Mineral Resources) Minister Gwede Mantashe’s office.”
Last year the government moved to bring clarity to the Mineral and Petroleum Resources Development Amendment Bill which is expected to bolster policy certainty.
Ramaphosa said administrative prices including rail, and electricity, as well as infrastructure bottlenecks, were a priority.
“Many thought mining was facing its sunset days. We are firm believers that the South African mining industry is in its rising sun days, and long will it last,” said Ramaphosa, adding that the government is in the process of addressing several concerns raised by business.