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South Africa is a failed state with no leadership, says...

DM168

NATIONAL CRISIS

Sibanye-Stillwater’s Froneman speaks out – ‘South Africa is a failed state with no leadership’

Sibanye-Stillwater’s Neal Froneman.(Photo: Waldo Swiegers / Bloomberg via Getty Images)
By Ed Stoddard
07 Mar 2022 26

The combative chief executive officer of diversified metals producer Sibanye-Stillwater takes off the gloves to speak out about the battles of mining companies.

Asked in an interview after the company unveiled record earnings about the social, policy and investment climate in South Africa, Sibanye-Stillwater CEO Neal Froneman replied: “My view is now that we are practically a failed state. It starts with inequality and poverty.

“This is not a mining issue; this is a national issue. This is a lack of leadership. This is a lack of people at the highest levels taking proper action against lawlessness, against crime, and it filters all the way down through the system. But, ultimately, because there is no economic growth, people are poor, people are angry, and, of course, there is a lack of capacity to deliver services.”

Indeed, as the results season for the South African mining sector wraps up, a common theme has been a spike in social strife, labour unrest and simmering anger over rising poverty levels stemming from the pandemic and failed government policies. Scavenging off this rage have been mafia-style shakedowns for procurement contracts, a state of affairs enabled by the Keystone Cops that are the South African Police Service.

“Because the law is not enforced you get these mafias and you get this lawlessness, as there are no repercussions for that. And because mining companies are seen as prosperous, and they do have services, they get targeted because everyone wants a part of it,” Froneman said.

And South African mining companies, riding the wave of a commodities boom, have certainly been prosperous of late, as the record earnings of Sibanye and some of its peers have shown. But that has been accomplished largely because of prices and in the face of a very rough domestic environment.  

“This kind of stuff is on the rise and it will stay on the rise until there is proper economic growth. And economic growth is only going to happen when you stop having ideologies of communism, socialism, and you have an investor-friendly climate and you don’t talk about expropriation without compensation. I could go on for a long time,” Froneman said.

And that he did…

“Government leadership has created this problem and they are doing nothing. The government can’t deal with it because it goes against their ideology. There is neither the capacity nor the competence to deal with it.”

Froneman also expressed concerns about the run-up to the ANC elective conference later this year: “It is going to get much worse towards the end of the year as we move towards the national ANC conference. That’s when you are going to find those with hidden agendas destabilising regions.”

He went on to say that business needed to step into the breach and, in many cases, fill the role of the state. SA mining companies are widely credited with providing the National Treasury with liquidity as their record profits have translated into record tax and royalty flows to the fiscus.

But they still have to splash out extra cash to maintain services that they have effectively already paid for. “We have started recognising that if we want to operate, unfortunately we’re going to have to become part of providing services to the communities that surround us. Government is too useless to do it.”

He also had some choice words for the shambolic state of the Department of Mineral Resources and Energy, which has overseen a massive backlog of mining rights applications and often seems incapable of doing its most basic tasks. This has led to a dramatic decline in exploration projects, so that South Africa now accounts for less than 1% of global exploration spend.

“Whether it’s a simple thing like implementing an exploration policy, the government can’t do it; it can’t even fix its bloody admin systems to sign off mining licences. It’s a pathetic state of affairs,” Froneman said. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

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All Comments 26

  • Are politicians listening? And a curse on big companies that fund the ANC! Mr Froneman, please lead the charge on an economic boycott of the ANC. DM, expose the funders and let’s shame or boycott them. The ANC is a failed party and will make us a failed state.

  • Hear, hear Mr Froneman! The problem is that you are preaching to the converted while those who can, and should, act are neither interested nor listening?

  • It has been a long time coming that someone in big business stood up and told the truth, but it takes great courage to do so. Not a single thing Neal has said is in the remote bit untrue, without basis or defamatory, and comes after a long journey of trying to keep this country working. Well said Sir.

  • Spot on! And look who heads up DMR…none other than a tired, confused Mantashe who would have been fired years ago in any half decent functioning country. On his watch SA mining has shrunk to a shadow of its potential. And he continues daily to torture truth and logic whenever he starts speaking.

  • Spot on Mr Froneman, we need more CEO’s of big companies coming out and saying this there has been too much silence and letting the ANC keep getting away with full scale incompetence, enough is enough with these useless, thieving Donald Duckers.

  • Well said, Froneman! The intended audience cannot take hints, so you have to be direct! Its lawless out there and when one tries to follow the law, the odds are always against you! Typical communist/socialist mentalities prevail and cannot make decisions because the tallest nail gets hammered first! Also, there is no context of top-tier benchmarking. Its easier to be the least-worst than the first best (my “least-worst principle”)! Fundamentals are failing in SA and nobody in government is actually doing anything about it. They don’t care! Private industry’s hands are tied. The ANC and other parties cut from the same cloth are only a cost layer and a hinderance to growth.

  • MR FRONEMAN SPEAKING OF “FAILED STATE” AFTER OBTAINING MINING RIGHTS FROM DMRE PART OF THE FAILED STATE, MADE MILLIONS FOR SHAREHOLDERS AND HIMSELF. HIS COMPANY SIBANYE-STILWATER SHOULD RELINQUISHED MINING RIGHTS OBTAINED FROM THE DMRE AS PART OF THE FAILED STATE.

    • you miss the point entirely Mr Thobani. government, cabinet including DMRE work for the taxpayers. the right given to DRME to grant mining rights is provided by taxpayers-not government or DMRE. they are custodians of everything in SA not the owners.

      • Mr Thobani seems to have learnt very well from his mentor Trump … put everything in CAPS … and you ‘win’ the point . Then I look at another comment below … also in all CAPS ! Infectious it seems … let’s see who can shout loudest !

    • There is NOTHING WRONG with making millions for an entrepreneur and shareholder when it is done HONESTLY and legally.
      What YOU SEEM TO IGNORE is that at the same time they have contributed to the fiscus, not to mention creating jobs…
      WHAT ARE YOU PROPOSING?? NATIONALISATION??
      THERE WILL BE NOTHING LEFT FOR THE CADRES TO TEAL…

      • Perhaps we need to take a message from Adam Smith, the founder of the science of Economics. In his Wealth of Nations magnum opus he pointed out that a country’s wealth lay in the use of Labour, that is hard work, and not in its Land and agricultural resources as previously believed by the Physiocrats. However the Labour or hard work needs to be done intelligently and vigorously, not the way in which the incompetent current public servants operate. This philosophy of Adam Smith has been proven by the records of Germany, Japan and the South East Asian countries in building up their economies after disastrous situations. I am sure the President is aware of this but is waiting, too patiently I think, to get rid of all the Zuma era ‘hangers on’. Hope he succeeds.

      • The mining industry has been corrupting South Africa since the time of Rhodes. All they do is pollute the enviroment exploit workers and corrupt politicians
        Look at the history of South Africa. Capitalism was introduced to South Africa by the British especially Rhodes. This involved wars of conquest, land dispossession (1913 Land Act) and the introduction of wage slavery. Rhodes was not a racist he despised working people but supported the British policy of creating a native elite who would support British imperialism. The native elite generally welcomed such a policy at first for example Ghandi. The Afrikaners refused to work for slave wages (As reactionaries demand of the working class in every country today) also they feared economic competition from British Monopoly Capital. This is why Apartheid was invented.

        This involved massive state intervention in the economy and high taxes to support a welfare state for the whites. Big business was happy with this as the government oppressed the black working class and banned trade unions. However by the 1980s things were going badly the black working class was revolting and had forced the government to legalise trade unions. Big business then set about befriending the native elite who had become antagonistic to capitalism as result of the apartheid policy. Globalisation has destroyed the countries industrial base and the only way for the elite to make money today is by fraud and corruption .

  • AGREE WITH ROB IT IMMEDIATELY BECOMES A RACIAL ISSUE.WOULD IT NOT BE BETTER TO ENCOURAGE MINING AND INDUSTRY THAN STY FILL THEM

  • In the early 1980’s business and community leaders working together in the Urban Foundation appointed a team of lawyers to identify every piece of legislation that had to be repealed to remove Influx Control . They handed the report to the National Party government and, with pressure as well, Influx Control was removed. Business working with NGO’s and professionals needs to think out of the box on steps that can turn this mess in our country round.

    • So true
      I was working on the mines at the time and they started employing and training non-whites in previously “reserved” jobs for which they got a lot of flack from both government and employees. And yes, it was done for profit, but AT LEAST IT WAS DONE!

  • Conflating the ‘ideologies of communism, socialism’ is where Froneman loses the plot. Frankly, a democratic socialist (European style) system is the ONLY thing that will work in South Africa. (He acknowledges as much when saying he’ll (the company) have to provide essential services.) I am not disputing his ‘failed state’ thesis. The answer, however, is NOT unfettered capitalism. (Really not the answer anywhere…)

  • Big business has long been complicit in the ANC’s reign of economic destruction by fawning over its BEE racist laws and celebrating every black figurehead they overpay. Hopefully Old Mutual giving Peter Mayo the push and Froneman’s belated comments are the beginning of a trend. Ignore their unlawful laws and use their own Stalingrad tactics in the courts.

  • Absolutely correct Mr Froneman- and we could add a few other things to the list such as sabotage of various entities and of course iniquitous systems such as cadre deployment which form the basis for so much corruption in both official appointments and state owned institutions. Well done sir for having the guts to speak out!

  • The mining industry has been corrupting South Africa since the time of Rhodes. All they do is pollute the enviroment exploit workers and corrupt politicians they have no problems working in failed states such as the DRC and Iraq !!

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