Tuesday May 25, 6:19 pm Eastern Time
Canada miners committed to post-Mandela South
Africa
By Paul Simao
TORONTO, May 25 (Reuters) - Canadian mining companies operating in South Africa are
shrugging off jitters about the country's future as it prepares to elect a successor to retiring president Nelson Mandela.
Despite concerns that foreign investors might be spooked by the 80-year-old Mandela's departure from active politics, major
foreign mining firms have embraced the transition in South Africa with surprising gusto.
Polls suggest that Deputy President Thabo Mbeki will lead the African National Congress to a resounding victory on June 2,
when South Africans cast their ballots in the second all-race elections of the post-apartheid era.
A Mbeki administration would be the second ANC-dominated government elected since South Africa abandoned
white-minority rule in 1994.
''We believe that the ANC is going to stay the course and the country will remain friendly to foreign investment. We have had
an extremely warm reception in South Africa and don't believe that will change,'' Placer Dome Inc. (Toronto:PDG.TO - news)
spokesman Hugh Leggatt said.
Vancouver-based Placer Dome, one of North America's senior gold producers, became the fourth-largest foreign investor in
South Africa late last year when it paid $235 million for a 50-percent stake in Western Areas Ltd. and the prized South Deep
gold mine.
Placer plans to spend another $30 million to modernize the mine, considered to be South Africa's best undeveloped gold
deposit, through to 2002, when a new mine shaft is expected to be commissioned.
The company employs about 7,000 people in South Africa.
The Canadian gold producer dismissed fears that a large ANC majority in next week's election could stir ambitions to rewrite
South Africa's post-apartheid constitution or nationalize key sectors of the economy.
Leggatt, a South African by birth, said maintaining the country's growing reputation as a pro-business environment was one of
the keys to tackling widespread economic and social problems.
Foreign investors, who initially feared the economic agenda of the ANC, have been pleasantly surprised by the government's
determination to fight inflation and adopt a conservative approach to spending.
Mbeki, who was groomed by Mandela as his successor, has gone out of his way during the election campaign to reassure
business leaders that the ANC would stick to its sober economic policies.
Mbeki has also won support from foreign miners who expect his administration to oversee passage of a new mining policy that
would free up access to prized mineral rights.
Foreign companies have complained that South Africa's minerals policy is antiquated and discourages investment because it
allows parties to hold rights with no immediate intention of using them.
''The ANC realizes they have to be pro-business for the country to survive. If they do rewrite any business laws, they will not
be Marxist-oriented. They will be pro-business,'' SouthernEra Resources Ltd. (Toronto:SUF.TO - news) Chief Executive
Chris Jennings said.
''I think Mbeki is very business-oriented.''
Toronto-based SouthernEra, which owns stakes in South Africa's Marsfontein and Klipspringer diamond mines, recently
acquired a $10.5-million controlling interest in Johannesburg-listed Messina Ltd.
The deal gives SouthernEra a stake in two platinum-bearing properties in South Africa's Northern Province. The company said
it plans to invest $41 million in the project during the next three years.
SouthernEra employs about 300 people in South Africa.
Ironically, the inflow of foreign mining dollars arrives at a time when the giants of South Africa's mining sector are loosening
their ties to traditional playgrounds.
Anglo American Corp. of South Africa , the country's largest and most prestigious mining company, recently decided to move
its headquarters and its primary stock listing to London. The stock debuted on the London bourse on Monday.
Anglo American was following a similar move by base metals heavyweight Billiton Plc (quote from Yahoo! UK & Ireland: BLT.L).
($1=$1.46 Canadian)
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