The decision of coal miner and exporter, Thungela, to acquire a controlling interest in Australia’s Ensham coal mine speaks volumes about why South Africa is no longer an attractive investment destination (Business Report, February 6).
The reasons listed by Thungela CEO, July Ndlovu, for this R4.1 billion investment provide a catalogue of what ails investment in South Africa: Transnet’s inefficient rail system, erratic power supply due to load shedding and what he euphemistically calls “infrastructure bottlenecks”.
The positives Ndlovu cites for investing in Australia are its well-established mining jurisdiction with support infrastructure industries and handy access to Japanese and other Asian markets.
But perhaps the most telling reason for Thungela’s Australian acquisition is the need “to de-risk our underlying business and to bolster the resilience of the company (thereby) creating value for our shareholders.”
Thungela’s faultless reasoning exposes the credibility of the ANC’s mantra that South Africa is open for business. It also reflects how history repeats itself when in the 1980s hundreds of international companies disinvested from South Africa not only because of apartheid, but because of the ANC’s rolling mass action and strikes which wrought havoc with production.
DR DUNCAN DU BOIS
DURBAN
BUSINESS REPORT