Could SA’s gold mining industry be gone by 2020? – by Patrick Cairns (Mineweb.com – May 27, 2015)

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Peter Major on how management has lost control of their mines.

The South African mining industry is in trouble. That is not in question. The only debatable point is exactly how much trouble it is in.

The industry on which this country’s modern economy was built has been stuttering since the global financial crisis. What investors and anyone else with an interest in mining’s role in the economy wants to know, is where this is headed.

Are we nearing a point where we will start to see a turnaround? Or is there a chance that things will simply continue to deteriorate?

Speaking at the JSE’s Power Hour in Cape Town, Peter Major, mining specialist at Cadiz Corporate Solutions, warned that one must be wary of thinking that things will always revert to an historically established mean. The mining environment in South Africa has changed so much over the last few decades that “the old rules no longer apply”.

“South Africa is the world’s richest country in terms of mineral resources,” said Major. “We have more resources than Russia and the US combined. This was the greatest mining country in the world for 100 years, but it’s not anymore.”

Major pointed out that issues like government interference, the power of and conflict between unions, and BEE legislation, have all contributed to a situation where mine productivity has dipped dramatically.

“Who’s in charge?” he asked. “The answer is somewhere between nobody and everybody, and both are detrimental.”

He is particularly concerned about the legal minefield that the industry has become.

“Nothing improves productivity when it’s legislated,” says Major. “I’ve never seen it or heard it. And mining has more legislation to deal with than any other industry.”

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