Like Discovery, which also pays for some of the fire engines in the South African commercial capital, precious metals producer Sibanye-Stillwater Ltd. ensures that water near its mines is safe to drink and roads are maintained and well lit; it upgrades schools and clinics. Food producer Tiger Brands secures water supply for the town that’s home to its fruit-processing business, and Investec Plc powers a traffic light near its offices during blackouts in Johannesburg. Glencore Plc, Anglo American Plc spinoff Thungela Resources Ltd. and other owners of an export terminal spend about $1 million a month to protect trains transporting their coal from cable thieves.
“It’s not altruism,” said Lungisa Fuzile, chief executive officer of the South African unit of Standard Bank Group Ltd., the continent’s biggest lender. “You can’t run a successful private business in a sea of chaos.”
Government incompetence, corruption and policy paralysis have left critical infrastructure in Africa’s most-industrialized nation in tatters, forcing companies to step into areas that are within the purview of the state in most countries.
Miners long ago figured out that if they want to be allowed to dig, they also need to have the local community on side. That usually means building roads, schools, hospitals, and community centres.
It’s a sorry reflection of the state of public infrastructure when the services provided by miners are the gold standard. The inability of the state to sustain public infrastructure raises the possibility that private installations will be appropriated and/or that taxes will be raised to close funding gaps.Click HERE to subscribe to Fuller Treacy Money Back to top