http://www.washingtonpost.com/business/
Oct. 9 (Bloomberg) — South Africa has the world’s richest mineral deposits, with $3.3 trillion in platinum, gold, iron ore and coal. That’s not enough to satisfy investors.
Extended labor strikes, aging mines and regulatory uncertainty have dragged the stock-market values of South African miners to a four-year low compared with global peers. At the start of 2013, the stocks traded with almost no discount.
“Without a question, if I look on a national level, South Africa is one of the most difficult places to operate in the world,” said Charl Malan, who helps manages $33 billion at Van Eck Associates Corp. in New York. “If you’re a non-South African company you trade at a premium multiple to a South African company.”
The shifting investor sentiment is a key topic at the Joburg Indaba conference that started in Johannesburg yesterday. A five-month platinum strike, dwindling gold reserves, persistent power blackouts and uncertainty over policy have prompted mining companies to act.
Anglo American Plc, the largest platinum producer, is selling mines that supplied one-third of its output last year. BHP Billiton Ltd., the world’s biggest miner, is planning to spin off some operations into a new company that will hold most of its assets in South Africa.
Gold Companies
Gold Fields Ltd. was the fourth-largest producer of the metal until it spun off most of its local mines last year. And a plan by the third-largest bullion company AngloGold Ashanti Ltd. to separate its local and foreign assets only failed because investors balked at an accompanying $2.1 billion share sale.
“The period 2004 to 2014, in our industry, should be regarded as a lost decade,” Anglo American Chief Executive Officer Mark Cutifani told the conference. “We have the single- largest measured minerals entry in the world yet in the course of the last 10 years, real values in terms of the prices for our companies listed on the JSE had declined 30 percent.”
The world’s largest platinum producers including Anglo American, Impala Platinum Holdings Ltd. and Lonmin Plc lost about 24 billion rand ($2.1 billion) in revenue from the strike that ended in June. It was the second prolonged stoppage at the mines since 2012, when police killed 34 employees near Lonmin’s Marikana operations in a single day during a wage dispute.
For the rest of this article, click here: http://washpost.bloomberg.com/Story?docId=1376-NCQ2CO6S973501-7S11AFG8FCQ8DM4KROPHSHONVG