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CAPE TOWN, SOUTH AFRICA – Robert Friedland could not have chosen a less auspicious day for his latest bid to persuade investors to take a chance on an unorthodox mining dream. Mr. Friedland, the Canadian billionaire founder of Ivanhoe Mines Ltd., is planning a huge mine in South Africa’s famed platinum belt.
But even as he touted the project at Africa’s biggest mining conference, the platinum sector was besieged by a prolonged strike by 70,000 workers, with producers warning of escalating losses and the growing likelihood that the strike will lead to major restructuring and job cuts.
To make matters worse, South African miners are deeply worried by a planned overhaul of the country’s mining laws, which could force the producers of “strategic” minerals to limit their exports and sell their products at discounted prices to domestic companies.
Many of South Africa’s top mining executives were in a gloomy mood on Wednesday at the Mining Indaba conference, complaining of a hostile government and a poor investment climate. The platinum strike is entering its third week, following the collapse of wage talks on Wednesday.
But Mr. Friedland told them to ignore their fears. His counterintuitive gamble on South African platinum could become as profitable as his earlier multibillion-dollar payoffs from Mongolian copper and Labrador nickel, he said.
He acknowledged the “tensions” in the platinum sector. “It is clear that the current labour turmoil is disruptive to industry and quite unnerving to some international investors,” he said. “These are short-term problems, which come with the territory, and we’re profoundly optimistic for the long-term prospects.”
Mr. Friedland, whose planned mine would create 10,000 jobs and could be the biggest mining project in South Africa over the next few years, argued that the labour unrest is a result of the “volatility” of politicized unions in the runup to a national election, expected in April or May. A year from now, this volatility will be gone, he said.
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