BRICS nations need to become serious players in African resources - CNBC Africa

BRICS nations need to become serious players in African resources

Mining

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Construction workers building letters that spell 'BRICS'. PHOTO: Getty Images

The competition for African resources has expanded since the BRICS (Brazil, Russia, India, China and South Africa) nations have joined in however, some of these states still face several challenges before becoming serious players in the continent's resources field.

“The belief that the BRICS nations would be the drivers of global growth is tailing off now,” said Michael Spicer, Vice President of the Business Leadership of South Africa at the Joburg Indaba 2013 on Wednesday.

He further explained that the players in the African resources field have expanded to include not only the traditional international mining companies, but also the BRICS (Brazil, Russia, India, China and South Africa) members too.

“The increased competition for African resources is good in the sense that there’s much more choice and has broadened the level of activity,” he explained.

An interesting factor about the new players in the resources field, the BRICS nations, is that their trade in African resources amounts to 340 billion rand a year, however 200 billion rand of that total stems from China’s dealings in Africa.

While these figures do indicate that the BRICS nations’ majority of trades with Africa are in resources, it also reflects that aside from China, the other BRICS nations’ growth rates remain stunted.

“There is recognition that aside from China, the other members of the BRICS including South Africa are all in trouble because the early phases of economic policy reform came to an end, they’ve used up the runway,” said Spicer.

“Now if they wish to grow fast again, they have to address their structural challenges.”

Focusing in on South Africa in particular, Spicer explained that historically, political stability was a major concern. Today however, issues of government policy uncertainty as well as poor management in mining remain the predominant challenges.

He believes that better management in the mining sphere, such as directly dealing with employees, could ensure that better labour relations are built.

“We’ve really got to regain control of management and its core functions. Stop delegating those out to the consultants, we’ve got to talk directly to the workforce, we’ve got to understand the challenges facing the workforce,” Spicer added.

“If we deal with these things, it’ll be much easier to deal with other stakeholders. Conversations that we have with government and labour will go a lot easier, so the time is now to reassert that management prerogative.”

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