African Mining Network

AMN was established to develop and build relationships across Africa’s mining community, and give the world a preview of what is happening in mining in Africa.

AMN - Miners can drive positive minerals policy change – comment by Yolanda Torrisi

Yol headshot May 2011

Government policy is a major factor that influences the success of mining industries across the continent and many a time we have seen a well-intentioned government intervention slow down and stagnate the industry. But to avoid the shell shock of yet another slowdown, we must encourage positive policy changes — constructive changes from Africa’s leaders that draw on the lessons of the past.

Last week, I was prompted to consider exactly what we can do to ensure mining policy does not have a negative effect on the industry and economies it supports.

Eunomix chief executive officer Claude Baissac’s presentation for the last African Mining Network dinner got me thinking. How can we learn from the past and ensure positive minerals policy changes for our future?

Baissac and his resilience advisors at Eunomix were commissioned by corporate leader Neal Froneman last year to work out how minerals policy changes in South Africa had affected producers.

The results from 15 years of policy change in the southern African nation were unsurprising but still disappointing. Mining operations, performance and investment decisions were affected by so-called reforms.

What were the lessons? First up, legislative change can exacerbate commodity price shocks. Policy interventions can also make markets more inefficient.

Certain interventions weaken sentiment and negatively affect commodity sectors. Instead of turning things around, the interventions can have negative effects, making economies more fragile as reforms fail to achieve their main goals.

Eunomix believes South Africa’s current mining policy intervention will lead to even more declines in the nation’s mining industry. It believes chartered reforms will ensure South Africa remains an under-performing nation, operating at less than its potential.

The research outfit has predicted 40,000 direct jobs will be lost as the reforms fail to achieve their transformative objective and mining declines. Social well-being is also tipped to decline with the state of the economy.

Eunomix’s research helps us take lessons from the past.

It’s up to us to use what we’ve learned to ensure greater certainty for our investments and economies. It’s up to us to share what strategies we think governments need to ensure growth.

Investment certainty can come from effective engagement with regulators; from laws that back us not drag us down.

Safety and sustainability can help us but we must put forward our views on what can work for the benefit of miners, producers and workers.

Our investment climates must encourage producers to invest not divest. We must keep dialogue open with communities and the governments that serve them. Understand, we are a part of a larger system.

The future of production in nations on the continent rests on the execution of a basic principle we must highlight. Reforms must be constructive to move things forward.

- Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact: