{"id":13872,"date":"2012-08-24T15:10:55","date_gmt":"2012-08-24T13:10:55","guid":{"rendered":"http:\/\/www.myza.co.za\/08\/text-fitchs-africa-mine-violence-highlights-structural-challenges\/"},"modified":"2012-08-24T15:10:55","modified_gmt":"2012-08-24T13:10:55","slug":"text-fitchs-africa-mine-violence-highlights-structural-challenges","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/text-fitchs-africa-mine-violence-highlights-structural-challenges\/","title":{"rendered":"TEXT-Fitch:S. Africa mine violence highlights structural challenges"},"content":{"rendered":"

\t\t<\/span><\/p>\n

(The following statement was released by the rating agency)<\/span><\/p>\n

<\/span><\/p>\n

Aug 24 – The violent protests at the Marikana platinum mine in
\nSouth Africa, which have tragically left 44 dead and sparked wage protests at
\nother mines, partly reflect factors peculiar to the platinum sector.
\nNevertheless, the protests highlight broader structural problems that have long
\nweighed on South Africa’s rating, Fitch Ratings says.<\/p>\n

<\/span><\/p>\n

These include policy uncertainty, particularly regarding the mining sector, and
\nlack of progress on education and labour reforms which, as acknowledged by last
\nyear’s National Development Plan, has resulted in insufficient growth to create
\nthe jobs required to put a dent in an unemployment rate of 25%. This, combined
\nwith diminished fiscal space, formed the basis for Fitch’s decision to put South
\nAfrica’s ‘BBB+’ rating on Negative Outlook earlier this year.<\/p>\n

<\/span><\/p>\n

The protests alone do not directly affect the sovereign rating, but they do
\nhighlight structural problems that may weigh on it. In the longer term, as we
\nhave previously said, failure to speed up growth and sustain job creation will
\nweaken South Africa’s credit fundamentals. High unemployment is already
\nassociated with widespread crime, which is regularly cited as one factor
\ndeterring foreign investment. Over time it could also threaten social and
\npolitical stability, damaging the investment climate further.<\/p>\n

<\/span><\/p>\n

The latest protests are another setback for South Africa’s mining sector, which
\nhas been struggling since the early 2000s. Overall output is below 1994 levels,
\npartly for geological reasons, but the sector has also suffered from
\nunder-investment as rising costs, political and policy uncertainty and most
\nrecently talk of mining nationalisation, has made South Africa a less favourable
\ninvestment destination compared with peers.<\/p>\n

<\/span><\/p>\n

Output growth has been meagre. Underinvestment and poor performance has seen
\nemployment in the mining sector fall by 131,000 jobs since 2001, at a time when
\nsurging commodity prices encouraged large-scale investment in other mining
\njurisdictions. Growing militancy and rising wages have added significantly to
\nlabour costs and undermined profitability. Wages in real terms have risen by
\n47% over the past decade, while strike action caused over 1.7 million man days
\nto be lost over the period.<\/p>\n

<\/span><\/p>\n

By failing to capitalise on the commodity boom, the country has missed an
\nopportunity to increase government and export revenue and to fast track
\ndevelopment – all fundamental to long-term improvement in a country’s sovereign
\ncredit rating.<\/p>\n

<\/span><\/p>\n

Many factors contribute towards a country being able to realise its resource
\npotential. Regulatory and fiscal regimes are amongst the most important
\ndeterminants of investment and therefore the growth potential of the mining
\nsector. The extent to which countries have been able to ramp up production and
\ntake advantage of higher commodity prices has varied substantially. We will
\nexamine this in more detail in a special report to be published later this year.<\/p>\n

<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

(The following statement was released by the rating agency) Aug 24 – The violent protests at the Marikana platinum mine in South Africa, which have tragically left 44 dead and sparked wage protests at other mines, partly reflect factors peculiar to the platinum sector. Nevertheless, the protests highlight broader structural problems that have long weighed […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-13872","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/13872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=13872"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/13872\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=13872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=13872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=13872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}