Anglo American’s chief executive has said South Africa is losing its position as Africa’s most industrialized economy by failing to address rolling blackouts and the poor condition of state-owned freight railways and ports.
Duncan Vanblad told the Mining Indaba industry meet-up in Cape Town on Monday that it was time for the country to deal with the “triple crises” of power cuts, broken logistics and corruption, reflecting growing corporate frustration with mounting crises under President Cyril Ramaphosa. was running out of ,
“Those are the three fundamental issues that unless addressed, will really impede growth and change in the country. , , And I don’t think it’s okay for business to sit quietly and watch this happen,” Vanblad, a South African who will take over at the FTSE 100 miner in 2021, told the Financial Times.
The warning from one of South Africa’s biggest investors signals a darkening mood among business as Ramaphosa’s ruling African National Congress party resolves serious problems at Eskom and Transnet, the state power and logistics monopolies that dominate the economy. struggles to do.
Eskom is imposing rolling blackouts of up to 10 hours a day as a fleet of old coal plants continues to break down, while Transnet’s freight railway network is in disarray due to increasing derailments and cable thefts.
“There’s a lot of effort going into government to solve this, but what I’m really strongly advocating here is that we do it much faster and more collaboratively,” VanBlade said.
Anglo, which has invested more than $6 billion in South Africa over the past five years, formed a joint venture with EDF in 2022 to invest in renewable energy projects in South Africa, which will power energy supplies under Ramaphosa. Part of the limited liberalization of Eskom crisis.
But South African miners are increasingly concerned over the crisis at Transnet, which controls vital supply lines but says it lacks spare parts for the trains and the safety to run them. Mining companies, including Anglo American, have responded by calling for more lines to be operated jointly with the private sector.
Coal exports from a major South African port fell to their lowest level since 1993 due to rail blockades last year, despite a surge in demand from Europe as power producers sought to replace sanctions-hit Russian supplies.
South Africa’s Minister of Mines and Energy Gwede Mantashe admitted on Monday that the country’s miners were held back by railway problems and were losing more than R150bn ($8.5bn) in bulk mineral sales.
Anglo has pulled out of the coal business in South Africa but said last week that railway problems had slashed sales at its Kumba iron ore operation by a third during the last three months of 2022.
“While the rail and port infrastructure is in dire straits, operational performance is now at a record low,” Vanblad told Indaba.
“I’m a bull on South Africa,” he said, adding that Anglos were not reconsidering investing in the country, despite problems with the power supply and railways. “We have a role to play in de-bottlenecking and providing capacity to the currently really stressed system. It would be madness of us not to try to help and participate in this.