For the world’s largest mining companies, it was a victory day. In South Africa — the top producer of platinum and also rich in gold, coal, ferrochrome, iron ore and other minerals — the ruling party-backed Cyril Ramaphosa as its new leader, putting him on a path to replace Jacob Zuma as the country’s president.
The political shifts are good news for the likes of BHP Billiton Ltd., Rio Tinto Group, Glencore Plc and Anglo American Plc, which have billions of dollars tied in mines in South Africa.
Ramaphosa, a businessman turned politician who will now have to fight national elections in 2019, was once a business partner of commodities giant Glencore, including a joint venture investing in coal. The new leader of the African National Congress, which has won each national election since the end of apartheid in 1994, plans to run on a reformist agenda.
How Ramaphosa would deliver his pro-growth program is far from clear, however. Hence, it may be premature for miners to cheer. And, in a worse case scenario, his business-friendly programs could backfire into the mining industry if they trigger social unrest.
For Ramaphosa, it would be a difficult balance; before his political and business career, he was a mining union leader. The new ANC head will have to deal with multiple crises, from sovereign debt downgrades and power blackouts to a local mining industry that has virtually thrown the towel in after Zuma pushed ahead with controversial reforms known as the mining charter. by Story by Javier Blas.