These were the views expressed by Minerals Council South Africa (MCSA) CEO Roger Baxter during his presentation at the Africa Downunder conference Thursday.
Currently, South Africa ranks only 48th out of 91 mining jurisdictions in the Fraser Institute's mining investment attractiveness rankings, with its 20/91 ranking for mineral potential assuming best policy and regulatory practice being negatively offset by its 80/91 ranking for mineral policies.
Baxter noted that "clearly there is a mismatch between the mineral potential and the policy scorecard".
"The consequences are evident with real net capital formation in mining declining by over 50% between 2013 and 2017. South Africa accounted for a poor 1% of total global exploration expenditure in 2017 compared to 14% for Canada and Australia respectively and 13% for the rest of Africa," he said.
This had resulted in a weak greenfields exploration pipeline and a limited pipeline of new mining projects being developed.
According to MCSA, the main issues undermining South Africa's mining and exploration competitiveness were policy and regulatory uncertainty, rising costs rising above inflation, infrastructural constraints, exploration restraints, a lack of trust between stakeholders and corruption.
Despite these challenges, Baxter said some positive steps had been taken, with government initiatives to tackle corruption and licence backlogs and promote investment, minister of mineral resources Gwede Mantashe working hard to overcome mistrust between stakeholders, and the withdrawal of the "problematic" mineral and petroleum resources development act amendment bill.
He noted there was overall better engagement between the Department of Mineral Resources and industry, and the new mining charter process had been detailed and inclusive, with some positive outcomes, such as recognising previous empowering transactions.
MCSA was optimistic that, while there were still some issues in the charter, there would be an outcome that promoted transformation and investor confidence to ensure growth and viability of the mining sector.
Mantashe said Wednesday he expected the new mining charter to be published by November.
Other "thorns among the green shoots" were the need to restructure some difficult commodities and anxiety about talks on land expropriation without compensation.
"There is still much more work to be done in finalising a workable charter, in developing a competitiveness and growth strategy for the mining sector, to assist some commodities through the specific economic challenges they face and in building the sector for the future", Baxter said.
"What is important is that stakeholders are working together and the processes are certainly pointing in the right direction."
