Mantashe faces same challenges and must do better this time

Mantashe faces same challenges and must do better this time

MINING analysts yesterday said Gwede Mantashe, newly appointed to the rejigged portfolio of Mineral and Petroleum Resources, has to work in tandem with fellow economic cluster ministers to end infrastructure bottlenecks and regulatory uncertainty negating growth in South Africa’s mining industry that is heavily bleeding jobs and capital.

President Cyril Ramaphosa on Sunday opted for continuity when he re-appointed Mantashe to the mining portfolio and flipped off the Department of Energy to a fully-fledged ministry.

Ramaphosa retained Enoch Godongwana as finance minister, now with two deputies.

Seleho Tsatsi, investment analyst at Anchor Capital, told Business Report yesterday Mantashe would be faced by challenges that South African mining companies were experiencing.

“One of the most pressing issues for the mining sector remains infrastructure, particularly the performance of Transnet,” said Tsatsi.

Transnet’s and Eskom’s infrastructure and energy underperformance has hammered the mining sector over the past few years.

Despite some improvement on the back of private and public sector collaborations to solve some of the challenges faced by Transnet, especially to do with the importation of spare parts for the rail sector, the impact is still being felt by bulk commodity miners.

“Recent feedback from thermal coal exporting companies indicates that Transnet Freight Rail is currently railing 46 million tons on an annualised basis based in the first half of the year. This remains well off levels of 70-71 million tons just 4-5 years ago and even below last year,” said Tsatsi.

Mantashe now has to intensify collaborations with other portfolios such as transport and energy to speed up policy reforms and provide guidance on partnerships.

In any case, added other analysts, Mantashe already knew the challenges that the industry faced.

Solidarity general secretary Gideon du Plessis said Mantashe had to focus on attracting further investment into the sector to avoid job losses.

Du Plessis said Mantashe “needs to ensure that there is regulatory certainty; that mining is attractive to investors and to have a cadastral system” that works.

“We don’t mind who is the Mines Minister but what we are now looking for is for Mantashe to focus on making mining attractive to investors and worthwhile for current miners to invest more in development,” he told Business Report.

“He needs to work together with the rest of the Cabinet to make sure that additional burdens placed on mining get resolved. There are local government services that mining companies are burdened with, issues to do with Transnet, Eskom and illegal mining activities,” said Du Plessis.

All these challenges “increased the cost and burden on miners, then they retrench” workers. Mantashe had to “use all his time and energy to make sure that eventually his legacy is that of placing South Africa’s mining sector on a growth” trajectory.

Unfortunately, at the moment, added Du Plessis, there had been little to show in terms of growth for the mining sector under Mantashe’s initial tenure as head of the mineral resources portfolio.

The Organisation Undoing Tax Abuse (Outa) said Mantashe “has overstayed his welcome” as he had “done far too much damage to the mining industry to have been allowed to continue to head up” the important portfolio.

BUSINESS REPORT