JOHANNESBURG – South Africa’s macro economic policies, particularly those considered for the mining industry, will erode competitiveness and stall investment, AngloGold Ashanti Chief Executive Mark Cutifani said on Thursday.
“We have got to be talking about working with the industry to grow the industry. The public debate is 180 degrees in the wrong direction in terms of encouraging the industry to invest and grow,” Cutifani told the Reuters Mining Summit.
Criticising measures being considered by the African National Congress-lead government including labour law reform and a proposed new resource taxes, Cutifani said South Africa’s public policies are “absolutely inconsistent” with its growth and employment objectives.
“We are struggling to remain competitive in South Africa. Its been a tough year … and if people are now talking about increasing taxes then the impact of that will be reduced investment,” he said.
The ANC is expected to discuss proposals that include a 50 percent windfall tax on mining firms at its major policy-setting meeting in June.
The ANC released a research paper earlier this year on extracting more wealth from its mineral deposits, with analysts saying it was meant to silence calls for nationalising mines in the major platinum and gold producer.
The document said nationalisation would be an “unmitigated disaster” for Africa’s largest economy and proposed other measures including the resource rent tax.
The ANC has also brought to parliament measures that would increase the rigidity of a labour market, ranked as one of the most inflexible in the world, and are expected to drive up personnel costs for employers.
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Cutifani has been critical of the Australian federal government’s new Mineral Resources Rent Tax and carbon taxes, its plans to cut the diesel rebate for miners and a potential increase in West Australian royalties payable for gold.
“My concern in South Africa at the moment is that the Department of Mineral Resources, industry and organised unions have a dialog but the general government appears to be formulating policy that is not heading in the right direction,” he said.
