South Africa could lose out in mining investments if the simmering racial tensions between its white and black populations spiral out of control, industrial experts have warned. Report on the British Daily Telegraph insinuates that most UK-listed mining companies could pack their bags and move elsewhere on the continent where investments are most needed.
Last weekend murder of white supremacist leader, Eugene Terre’Blanche has not only heightened the anxiety of a racial South Africa but dampened the post-apartheid and multi-racial country built by Nelson Mandela.
With the National ANC Youth wing leader, Julius Malema accused of spreading racial hatred for the banned apartheid song: “Kill the Boer, kill the farmer”, the death of former Afrikaner Weerstandsbeweging, AWB, leader, Terre’Blanche was quickly politicised, blaming it on Malema’s controversial song.
Malema who was visiting Zimbabwe on the day the murder took place had denied any link to the killing while Jacob Zuma appealed for calm.
And as the tensions grow, UK-listed miners who have huge dividends in the South Africa mining industry wouldn’t hesitate to leave if there is a possible widespread violence that could disrupt their mining output, according to the British paper.
Companies such as the Anglo-American, Rio Tinto, BHP Billiton and Xstrata have major assets in South Africa. It is reported that Anglo-American alone has majority stakes among the country’s miners and a bigger share of the more than 10 per cent of the FTSE100 owned by the four companies put together.
Eighty-five per cent of the global reserves of platinum used to make catalytic converters for vehicle come from South Africa, according to its Minerals and Energy Department, and a diversion of investment could hurt the economy, experts say.
“If South Africa adds to the problems it already has, investment is going to go elsewhere. Other African countries such as Mozambique and Burkina Faso are opening up to foreign investment. South Africa’s main advantage is its infrastructure, but these developments could prompt companies to look to safer countries to invest,” said John Meyer, head of mining at broker Fairfax.
The tensions seem to have settled down with the AWB spokesman, Pieter Steyn who earlier promised to avenge the death of their leader now retracting his words, saying the comment was made during the heat of the moment. He said its members will now be focused on the burial of its leader.
“The AWB is not going to engage in any form of violent retaliation to avenge Mr. Terre’Blanche’s death. We appeal for people to remain calm. Anyone engaging in any form of violence is not doing it as AWB,” said Pieter Steyn.
Two people have been held for Terre’Blanche’s murder and are expected to face trial today.