LONDON, December 6, 2011 /PRNewswire/ --
Kemet CEO argues miners in Africa should 'embrace this process now'
Mining companies risk jeopardising their future growth in Africa if they fail to work with governments towards their mutual best interests, Brian Menell warned delegates at today's Mines & Money conference in London.
"If we as an industry succumb to our natural instincts to rigidly resist any increased state intervention, we will be inviting enforced value transfers that will prove much more costly, than if we engage with genuinely open minds." Mr Menell said in his speech. "In my view, the winners and the losers in our industry over the coming decades, will be distinguished between those that embrace this process now, and those that put their head in the sand and hope that it will go away."
Brian Menell is Chief Executive of Kemet, a group of private companies that invests in, and manages, a range of natural resource projects across Africa, and CEO of TINCO, a leading tin mining and development company. Brian was born in Johannesburg and has over twenty years' experience in the mining industry having worked on mining and natural resources projects across 17 African countries.
Resource nationalism has become an increasingly pressing issue for mining companies in the last year with an Ernst & Young report naming it the leading global business risks for mining and metals businesses. A number of African countries, including Ghana and Zambia, have recently moved to increase taxes on mining operations, and other governments, such as Guinea, have proposed new legislation to increase state ownership in mining operations.
In stressing the importance of managing the risks of resource nationalism, Brian Menell argued that "the single most important thing that company's and senior executives need to do in order to manage the resource nationalism game, it to act with respect." He warned that: "If we drop in on flying visits, and act like we have all the answers, and act like we don't think that we need to bother to show an understanding of local historical, cultural and political dynamics, we will fail, and end up as targets for endless value extraction until we eventually run away."
Brian Menell argued that the current trend of resource nationalism in Africa was being driven by a "growing democratisation, and an increasing sensitivity, even amongst autocratic regimes, to populist and media sentiments". While many resources companies may be tempted to resists state intervention, they would do more to preserve their long term interests by engaging with governments, to ensure that National Mining Companies are structured according to the principles of value for value and long-term sustainability.
1. Business risks facing mining and metals 2011-12 http://www.ey.com/GL/en/Industries/Mining---Metals/Business-risks-facing-mining-and-metals-2011-2012
For further information, please visit: http://www.kemetgroup.net or please contact:
Pelham Bell Pottinger
Victoria Geoghegan, +44(0)20-7861-3925
SOURCE Kemet Group