JOHANNESBURG (miningweekly.com) – South Africa’s deterioration as an attractive mining investment destination should come as no surprise, said Cliffe Dekker Hofmeyr corporate and commercial practice director Allan Reid on Friday.

Mining companies were still frequently finding themselves at loggerheads with “unrealistic demands of the regulator” and a delay in the finalisation of amendments to South Africa’s mining legislation and regulatory framework, which were expected by late last year, was creating uncertainty.

The consultative process between government, organised labour and industry players through the Mining Industry Growth Development and Employment Task Team (Midgett) was meant to help resolve a number of issues relating to legislation; labour, including unrest, supply and skills; mining and prospecting rights applications; and policies.

But, he said, the Midgett did not “appear to have had much tangible success”.

Reid was responding to a South African Institute of Race Relations (SAIRR) survey published this week, detailing how the country has become significantly less attractive to mining investors since 2006.

The latest Fraser Institute survey, published in 2011, ranked the country 67 out of 79 jurisdictions surveyed. In the previous year, the country was ranked 61 out of 72 regions.

The SAIRR reported that uncertainty over nationalisation and mine ownership, and increasing work disruptions were affecting investors' willingness to get involved in mining ventures in South Africa.

South Africa was also finding itself competing with other African countries for mining investments.

“In addition, investment resources are becoming scarcer due to the ongoing eurozone crisis. Alternative markets in Canada, Australia, Asia and South America are expanding. South Africa has no option but to radically improve its image as a mining investment destination. The mining industry can only do so much. The burden for reform lies squarely on the shoulders of government,” Reid said.