Mar03, 2011
By Allan Seccombe, Business Day
SA SLID further down the country rankings in the prestigious Fraser Institute’s latest survey measuring the attractiveness of governments’ mining policies.
The Department of Mineral Resources has set its sights on correcting perceptions about SA as an investment destination. But the country’s rankings in the survey published yesterday dropped to 67 out of 79 countries from last year’s position of 61 out of 72 .
SA was ranked this year only four places higher than Zimbabwe. In 2008, SA ranked 49 out of 71 countries.
The Vancouver-based institute based its findings on responses from 494 exploration, development and mining-related companies around the world .
While a surge in metal prices has made miners optimistic about business prospects, many respondents are concerned about a growing trend of resource nationalism and new mining taxes .
The institute described its policy index as a "report card to governments on how attractive their policies are from the point of view of an exploration manager".
"For virtually every jurisdiction there is a feeling that things are getting worse, as opposed to better," said Fred McMahon, co- author of the report.
In June, Mineral Resources Minister Susan Shabangu said: "We have set a target for SA to improve the negative perceptions of its regulatory framework, from the current Fraser Institute level of 61 out of 72 countries to feature within the top quartile by 2014."
The Department of Mineral Resources yesterday declined to comment on the latest survey.
"We’ve not seen the complete report and we need to analyse it before we can comment," said department spokeswoman Zingaphi Jakuja. "We are not privy to their methodology."
In June, the government, labour and mining companies agreed on a strategy to grow and transform the mining sector.
They set up the Mining Industry Growth, Development and Employment Task Team (Migdett) to identify the bottlenecks that caused SA to miss out on the commodity boom that ended in late 2008 and to devise strategies to ensure it does not miss the next boom.
The strategy has begun unfolding, with the department ending a moratorium it placed on accepting prospecting rights until it completed an audit of licences granted since May 2004 and cleaned up its database.
An online system to lodge and monitor mining and prospecting rights was unveiled last month and Ms Shabangu said amendments to the Mineral and Petroleum Resources Development Act aimed at weeding out ambiguities would be finalised this year.
The mining sector grew 6% last year, albeit off a low base set in 2008, when electricity constraints battered the industry, and 2009, when the effects of the global financial crisis were felt.
"I think there is a very definite timing mismatch between the survey and the things that are taking place in the Migdett process," said Roger Baxter, chief economist at the Chamber of Mines and a member of the task team.
"The survey has come at a time when a lot of work is being done to turn the sector around. There’s constructive discussion going on to resolve constraints.
"We’ll start seeing some good progress in the next six months to a year. Hopefully in the next Fraser rankings we’ll be a bit higher up the pecking order."
The Department of Mineral Resources has set its sights on correcting perceptions about SA as an investment destination. But the country’s rankings in the survey published yesterday dropped to 67 out of 79 countries from last year’s position of 61 out of 72 .
SA was ranked this year only four places higher than Zimbabwe. In 2008, SA ranked 49 out of 71 countries.
The Vancouver-based institute based its findings on responses from 494 exploration, development and mining-related companies around the world .
While a surge in metal prices has made miners optimistic about business prospects, many respondents are concerned about a growing trend of resource nationalism and new mining taxes .
The institute described its policy index as a "report card to governments on how attractive their policies are from the point of view of an exploration manager".
"For virtually every jurisdiction there is a feeling that things are getting worse, as opposed to better," said Fred McMahon, co- author of the report.
In June, Mineral Resources Minister Susan Shabangu said: "We have set a target for SA to improve the negative perceptions of its regulatory framework, from the current Fraser Institute level of 61 out of 72 countries to feature within the top quartile by 2014."
The Department of Mineral Resources yesterday declined to comment on the latest survey.
"We’ve not seen the complete report and we need to analyse it before we can comment," said department spokeswoman Zingaphi Jakuja. "We are not privy to their methodology."
In June, the government, labour and mining companies agreed on a strategy to grow and transform the mining sector.
They set up the Mining Industry Growth, Development and Employment Task Team (Migdett) to identify the bottlenecks that caused SA to miss out on the commodity boom that ended in late 2008 and to devise strategies to ensure it does not miss the next boom.
The strategy has begun unfolding, with the department ending a moratorium it placed on accepting prospecting rights until it completed an audit of licences granted since May 2004 and cleaned up its database.
An online system to lodge and monitor mining and prospecting rights was unveiled last month and Ms Shabangu said amendments to the Mineral and Petroleum Resources Development Act aimed at weeding out ambiguities would be finalised this year.
The mining sector grew 6% last year, albeit off a low base set in 2008, when electricity constraints battered the industry, and 2009, when the effects of the global financial crisis were felt.
"I think there is a very definite timing mismatch between the survey and the things that are taking place in the Migdett process," said Roger Baxter, chief economist at the Chamber of Mines and a member of the task team.
"The survey has come at a time when a lot of work is being done to turn the sector around. There’s constructive discussion going on to resolve constraints.
"We’ll start seeing some good progress in the next six months to a year. Hopefully in the next Fraser rankings we’ll be a bit higher up the pecking order."
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