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The Dangers of Exiting SA When You are ‘Friends’ With the Government

Dear Editor

Mineral Resources and Energy minister Gwede Mantashe has just said the quiet part out loud. He’s reported to have said that because Shell wants to exit its downstream, filling station business in South Africa he will be more reluctant to grant the company exploration and drilling rights for oil and gas.

This statement is very revealing. First, it demonstrates the experience of many mining companies that deal with Mantashe’s department. They know that if they ever upset the ANC they will be punished by the ANC making administrative processes difficult, slow or impossible.

The companies know too, that should they complain about incompetence or corruption in the department they will suddenly find that the issuing of mining rights and permissions will slow down, stop or be refused outright. Their businesses will be harmed as a result. This is purely and simply gangster tactics on the part of the ANC.

The response to this is that investors do not invest or withdraw their investments from South Africa. That results in lost jobs and lost tax revenue as mines that should be created to draw out South Africa’s great mineral wealth remain at the planning stage and investment goes to countries that manage their economies according to rules that they have laid down publicly.

Those are easier to deal with than the whims of some economic warlord, as likely to have a hissy fit over a perceived offence as he is to punish for the exclusion of one of his friends in the profit stream.

Secondly, South Africa’s great oil and gas potential remains a dream on paper until oil majors commit huge amounts of money to exploration. That is less likely while Mantashe feels he can openly threaten those he disagrees with. He should be rolling out the red carpet to persuade them to invest, because that investment will ensure employment and revenue growth, and jobs and better lives for South Africans.

Mantashe has shown once again why South Africans will continue to live in poverty if they allow the ANC to continue mismanaging the natural resources which should be our birthright.

Regards

James Lorimer MP
DA Shadow Minister of Mineral Resources

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