It said real net fixed investment in South Africa's mining industry declined in both 2015 and 2016, despite the global mining environment recovering in most major jurisdictions.
The mining industry's real GDP in 2016 was 2.6%, according to Statistics South Africa, which was smaller than in 1994, while the financial services sector grew 168% over the same period.
The chamber noted the country's mining sector had consistently fallen down the Fraser Institute investment attractiveness index, despite the same institute ranking South Africa in the top quartile for its mineral potential assuming best policy and governance practice.
It conducted a survey among its members, asking whether the cause of these issues was a lack of potential or due to the negative impacts of the current toxic policy, governance and regulatory environment.
The CoM also asked what could happen if the policy, regulatory and governance environment improved substantially enabling the industry to return to the top 25% of global mining jurisdictions.
The findings were published on December 14 in a report titled ‘What If? Mining investment in SA in an improved policy and regulatory environment', with one key finding that publication of the Department of Mineral Resource's Reviewed Mining Charter would significantly aggravate the decreasing trend in investment.
Five companies of the 16 responding replied they were not considering any potential new investments in the current circumstances, with one company contemplating divesting from South Africa all together if conditions did not improve.
The chamber also found that most of the currently planned investment is classified as "stay in business" capital, while investment in new mines halved between 2012 and 2016.
The estimated currently planned capital spending in the mining sector of R145 billion (US$10.75 billion) could potentially increase by 84%, or R122 billion, in a more stable and conducive environment, which could also add 150,000 direct and indirect jobs.
"The current uncertain policy and regulatory environment caused by the unilateral development and release of the DMR's Reviewed Mining Charter, the lack of finalisation of the MPRDA Amendment Bill, the inappropriate use of Section 54s and serious allegations of corruption and state capture contributed to the malaise that has resulted in the South African mining industry placing a freeze on investment in new projects," the CoM said.
Chamber of Mines CEO Roger Baxter said the finding of the survey demonstrate that "if the leadership focus in South Africa is shifted to creating an attractive policy, regulatory and governance environment — through ethical leadership, good governance and the adoption of competitive, stable and predictable policies — considerable new investment in mining can take place".
He said this could have immense economic and transformation benefits, with profound multiplier effects, resulting in increased annual investment, jobs, export earnings and GDP.
"Taking this into account, the economic and transformational opportunity cost of the current toxic environment is detrimental to each and every South African," Baxter said.
