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Gold Fields welcomes B4SA's economic recovery strategy - Mining Weekly

Wednesday, 22 July 2020

JSE-listed gold miner Gold Fields welcomes the accelerated economic recovery strategy published by Business for South Africa (B4SA) in mid-July, which is aimed at achieving higher levels of economic growth post Covid-19.

A number of key priority areas for the mining sector have been identified by the Minerals Council South Africa and B4SA in the wake of the sector's 10% economic decline over the past decade.

These include the critical need to improve the country's competitiveness and ease of doing business, significant structural economic and institutional reforms and regulatory reform.

It also includes the need to address crime and corruption, infrastructure investment, restructuring of State-owned enterprises (SOEs), unlocking private sector investment in infrastructure, energy liberalisation, supporting black economic empowerment (BEE) and investing for modernisation and competitiveness.

However, Gold Fields notes in a statement that, while these key areas need to be urgently addressed to ensure economic recovery, and ultimately save and create jobs in mining, the emphasis will be on the South African government to provide the economic leadership in a social and economic compact with business and organised labour.

Gold Fields CEO Nick Holland says the government's economic narrative is generally sound, but these situations have been experienced before and the requisite progress has not been forthcoming. "If you take a look at the key areas holding back economic growth and investment in South Africa, they require tough choices to institute structural and economic reforms."

He lists these areas as creating a more stable policy, regulatory and operating environment, that is more conducive to investment, and providing clarity around key aspects of the Mining Charter and associated legislation, particularly around recognition of previous BEE deals when mining licences are renewed or extended.

Holland adds that, of equal importance, is the need to review labour legislation, reform key SOEs and address unaffordable electricity tariff increases, load-shedding and lack of urgency around regulation of renewable energy.

Further, he also notes that improving delivery capacity of local government will drive delivery in many mining areas, and agrees with B4SA that the issue of corruption and crime requires attention.

Holland points out that regulatory and policy uncertainties undermine competitiveness and investor confidence, not just in mining, but in the economy as a whole. "The mining sector, with high capital requirements, long lead times and price volatility, can be thrown off course by onerous and uncertain regulations, such as the frequent alterations to the Mining Charter."

In this regard, he says the sector requires stable and consistent regulations and laws that are evenly applied so that it has the means to recover from and assist governments when crises, such as the current Covid-19 pandemic, strike.

"Once a sound regulatory framework has been established, it is our responsibility to run our business so it creates value for all our stakeholders."

Holland says the Covid-19 pandemic has served as a catalyst in bringing together sections of society which do not normally cooperate easily. "The Minerals Council has had constructive engagements with Minister [Gwede Mantashe] on helping the sector through the Covid-19 crisis, and looking at how to revive the mining sector post Covid-19."

More specifically, he says that, in gold mining, Gold Fields has found itself working far more cooperatively with key stakeholders, such as trade unions, communities, industry peers and government.

"The Covid-19 crisis has galvanised us in speeding up some changes in the industry, which should have been started years ago. Let us build on this experience for our mutual benefit." 

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