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INDABA REVIEW African Leaders Gather in Cape Town to Discuss the Future of Mining While South Africa's industry appears mired in gloom, elsewhere on the continent things look considerably brighter By Gavin du Venage The mood was curiously upbeat at this year's African Mining Indaba in Cape Town, the region's largest trade fair. With South African mining in the doldrums, the event drew energy instead from the gathering opportunities that lie much further north. More than 7,500 delegates and 1,500 companies attended this year's event, making it the biggest ever, according to Indaba Managing Director Jonathan Moore. Unlike previous years however, the talk was less of South Africa, the continent's mining giant, and focused more on its upcoming challengers such as Ghana, Sierra Leone and Kenya. South Africa's mines are caught between declining profitability, a saturated playing field dominated by majors, uncertain legislation and as became tragically obvious last year, the worst labor unrest since the fall of apartheid in 1994. Last August a wildcat strike called by a breakaway union of workers at Lonmin's The Exxarro booth at the African Mining Indaba. 38 E&MJ; • MARCH 2013 operations in the Marikana area of Rustenburg, in the heart of the country's platinum belt, led to 34 miners being shot to death by police. Images of the clash were captured by media crews and carried worldwide. The incident is illustrative of the position in which South Africa's mining industry finds itself. South Africa has around 80% of the world's platinum reserves. It has long been a hope of the government and mining companies that platinum will take the baton from gold, as shafts go ever deeper in search of declining gold reserves. The Marikana shootings were whispered about in the corridors of the Indaba and reflected prominently in speeches given at various forums. The shootings, however shocking, merely drew attention to the longstanding underlying malaise the industry faces. A fall in commodity prices driven by Europe's weak economy—together with above inflation wage cost increases over most of the past decade—have pushed platinum producers to the edge of sustainability. As a result, foreign investment in the country fell by 44% in the second half of 2012 compared with a year earlier, according to PricewaterhouseCoopers, the global financial services firm. Just weeks before the Indaba, Anglo America Platinum announced it would cut 14,000 jobs to save costs, sending a shockwave through the industry and the government. Angloplat is not the first to announce pit closures—Australia's Aquarius began selective mothballing six months ago—but it is one of the largest producers of PGMs and its announcement carried a substantial psychological impact. Following the Angloplat announcement, the country's Minister of Mining, Susan Shabangu, threatened to seize the rights to idled mines. She has since moderated her comments after the government and Angloplat agreed to a 60-day cooling off period and to hold talks on the issue. It's hardly surprising therefore that Shabangu's speech at the Indaba was one of the best attended events. So was that of the CEO of Anglo American, Angloplat majority shareholder, Cynthia Carroll. The opinions of the two women at the top of the South African mineral food chain mattered, even if one of them was in all likelihood addressing the forum for the last time. As expected, Shabangu touched on the raucous debate over nationalization, which caused bitter dissension within the ruling African National Congress and sent shivers of fear throughout the South African industry. "Nationalization is not an option for our country," she said. The ANC had struck down nationalization at its elective congress in December, and the matter should now be left to rest, she said. "In this regard, I appeal to you not to try to resuscitate this debate in different forms and guises, which may invariably be marred by differently unhelpful interpretations." www.e-mj.com