South Africa is squandering its position as Africa’s most industrialised economy by failing to resolve rolling blackouts and the parlous state of state-owned freight railways and ports that are throttling mining exports, Anglo American’s chief executive has said.
Duncan Wanblad told the Mining Indaba industry meet-up in Cape Town on Monday that the country was running out of time to tackle the “three scourges” of power cuts, broken logistics and corruption, reflecting rising corporate frustration with mounting crises under President Cyril Ramaphosa.
“They are three fundamental issues that unless addressed will really inhibit growth and transformation in the country . . . and I don’t think that it is OK for business to sit quietly by and watch that happen,” Wanblad, a South African who took over at the FTSE 100 miner in 2021, told the Financial Times.
The warning from one of South Africa’s biggest investors is a sign of the darkening mood among business as Ramaphosa’s ruling African National Congress party struggles to address crippling problems at Eskom and Transnet, the state power and logistics monopolies that dominate the economy.
Eskom is imposing rolling blackouts for up to 10 hours a day as a fleet of ageing coal plants keep breaking down, while Transnet’s freight railway network is falling into disrepair as derailments and cable thefts mount.
“There is a lot of engagement in government to try and solve this, but what I am really desperately advocating for here is that we do it a lot quicker and more collaboratively,” Wanblad said.
Anglo, which has invested more than $6bn in South Africa in the past five years, formed a joint venture with EDF in 2022 to invest in renewable power projects in South Africa, part of a limited liberalisation of energy supplies under Ramaphosa to deal with the Eskom crisis.
But South African miners are increasingly alarmed at the crisis in Transnet, which controls vital supply lines but says it lacks spare parts for trains and security to run them. Mining companies including Anglo American have called for more lines to be operated jointly with the private sector in response.
Rail disruptions last year caused coal exports from a key South African port to hit their lowest level since 1993, despite a surge in demand from Europe as power producers sought to replace sanctions-hit Russian supplies.
Gwede Mantashe, South Africa’s mining and energy minister, admitted on Monday that the country’s miners were held back by railway problems and were losing out on more than R150bn ($8.5bn) of bulk mineral sales.
Anglo has withdrawn from the coal business in South Africa but said last week that railway problems had also slashed sales at its Kumba Iron Ore operation by a third during the last three months of 2022.
“The rail and port infrastructure is in an extremely poor condition, with operational performance now at record lows,” Wanblad told the Indaba.
“I’m a bull on South Africa, absolutely,” he said, adding that Anglo was not reconsidering investments in the country despite the power supply and railway problems. “We have a role to play in de-bottlenecking and capacitating the system that is currently really stressed. It would be nuts for us not to try and help and participate in that.”
