Around $20 billion investment made by several companies at conference: President

The President said this when he addressed day two of the Investing in African Mining Indaba at the Cape Town International Convention Centre on Tuesday.

Since President Cyril Ramaphosa announced his massive investment drive for the country, at least US$20 billion has been amassed.

Last year, the President announced an ambitious plan to attract investment to the country of $100 billion in the next five years. And, in the past few months, this drive has already seen investments pour into the amount of $20 billion.

The President said this when he addressed day two of the Investing in African Mining Indaba at the Cape Town International Convention Centre on Tuesday. 

The conference is being attended by Heads of State, investors and dealmakers from around the world. 

“We have recently returned from the World Economic Forum in Davos and a State visit to India, where we engaged with the investment community on, among other things, South Africa’s ambitious programme to mobilise far greater levels of investment. 

“Our message to international investors is that we are taking practical measures to build an economy that is underpinned by inclusive growth, competitiveness and transformation. 

“This message found practical expression in the inaugural South Africa Investment Conference, which we hosted in October last year. 

“Several companies at the conference made announcements of investments, which amounted to around $20 billion in total,” the President said. 

The investments, President Ramaphosa said, are a clear indication that the South African economy has a lot to offer, and that opportunities for growth are abundant if the country harnesses its areas of comparative advantage and creates an environment conducive to investment. 

“The fact that three of these major investment announcements came from the mining sector gives credence to our view that mining in South Africa is a sunrise industry. 

“We expect that they will make a valuable contribution to accelerated economic growth and greater job creation,” he said. 

With South Africa’s mining industry having a long history that spans over 150 years, the President said the country’s mineral wealth has attracted large capital investments over the decades, resulting in the development of integrated industrial value chains that generate significant value for the economy. 

“South Africa hosts the world’s largest reserves of platinum group metals and manganese, and some of the largest reserves of gold, diamonds, chromite ore and vanadium.  

“As a government, we regard the mining industry as a key player in the future growth and development of our economy, with huge potential for exploration, production and beneficiation. 

“It is for this reason that we have prioritised the restoration of policy and regulatory environment that is stable and predictable. 

“Significant work has been done to remove the uncertainty that held back the development of the industry,” he said. 

Steps being taken to address investor concerns 

The President said, meanwhile, that the country has emerged from a period of strained relations where the courts became the main platform of engagement between the industry and government. 

He said government undertook to hold engagements with the industry because it recognised the critically important role that mining can and must still play in shaping the future of the country. 

“To this end, we moved to speed up the finalisation of the Mining Charter and to provide greater clarity on the Mineral and Petroleum Resources Development Amendment Bill. 

“Because of their importance, these actions formed a critical component of the Economic Stimulus and Recovery Plan we announced in September 2018 after our economy went into a technical recession. 

“As part of the package, the government is reprioritising spending -- within the existing fiscal framework -- towards initiatives that are aimed at driving economic activity, including financial and non-financial measures to turn around the economy.” 

The President said government further recognised the challenges raised by investors, including administered prices for ports, rail and electricity, as well as infrastructure bottlenecks. 

“We welcome the interactions we have had with the private sector, representing both local and international, on a number of issues that are of concern to them and some matters of concern to us. 

“We are working in earnest to address the constraints that were raised with us, as we implement the Stimulus and Economic Recovery Plan. We are addressing issues that are of concern to companies such as Visa Regulations, reducing the cost of doing business, eliminating many bureaucratic constraints and making it a lot easier to conduct business,” he said. 

Government to unveil Eskom recovery plan 

The President assured that work is being done to address energy concerns in relation to Eskom. 

He said investors had raised concern over an important infrastructure challenge - the security and affordability of energy supply. 

“We have been giving detailed attention to the crisis at Eskom. Eskom is currently facing significant operational, financial and structural challenges. 

“Eskom’s contribution to the health of our economy is too great for it to be allowed to fail. It is 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 the security of energy supply for the country,” he said. 

Land expropriation to promote economic activity 

President Ramaphosa said the government has used its engagements with investors to outline South Africa’s approach to land reform. 

He said investors raised a concern about the proposal for the expropriation without compensation to be among the mechanisms used to promote land reform. 

“We must emphasise that our approach will enhance, rather than undermine, property rights as we seek to address what we have termed the original sin that was committed against black South Africans during colonial and apartheid days. 

“The measure we are proposing will apply to land for the purposes of land reform only, and within a clearly defined set of circumstances. 

“This measure will be undertaken in a way that promotes economic development and agricultural output, and that does not undermine the principles of our Constitution or the rule of law.

“Investors need not fear that their investments and assets will be taken away from them,” President Ramaphosa said.

(With inputs from South African Government Press Release)