ALLAN SECCOMBE, Johannesburg | Tuesday
SOUTH Africa’s mining industry is haemorrhaging skilled workers and squandering opportunities to tap into the mineral wealth of its neighbours, says Gold Fields chief executive Chris Thompson.
Thompson, who is also chairman of Gold Fields Ltd, South Africa’s second largest bullion producer, said there were a number of measures the industry and the government could take and were taking to create more black-empowerment junior mining groups and to fuel mineral exploration.
”Perhaps the most useful would be a relaxation of foreign exchange restrictions so that foreign capital could flow into fund raisings by local companies, who could then use the funds to explore throughout Africa or locally,” Thompson said.
Gold Fields plans to diversify outside South Africa, but its plans suffered a major blow when the government rejected its proposed $3.7bn merger with Canada’s Franco Nevada.
Gold Fields has said it is considering spinning off its Ghana gold mine and a Finnish platinum project into a foreign subsidiary next year to tap foreign funding.
”Outside of gold, there is still excellent exploration potential for new mineral deposits in South Africa and of course the rest of Africa on our doorstep is still the most unexplored region in the world.
”It’s ironic that it’s the Canadian juniors that have done all the discovering in Africa recently. They are eating our lunch,” Thompson told a South Africa/Canada Chamber of Business meeting.
The South African mining industry is dominated by a handful of major players, but the government was on the right track to create opportunities for increased participation of black groups in mining, he said.
The Mineral Development Bill, which intends giving mineral rights to the state and to prevent the hoarding of rights by mining companies, could boost the size of the junior mining industry, he said.
”The issue of compensating the previous owners of mineral rights remains a thorny one still to be resolved,” he said.
Gold mining companies should spend more on promoting bullion to ensure the metal remained a viable commodity, Thompson said.
The industry spent $30m on promotion last year, which was far below what the industry was spending on exploration for new deposits, he said. – Reuters