12 March 2010 Get a move on By NAZMEERA MOOLA Last Thursday I sat in a magnificent venue and listened to President Jacob Zuma and the lord mayor of London ramble through polite, "don't our countries have so much in common" speeches that are commonplace for such dinners.

However, amid the platitudes, Zuma made an important declaration. He said that despite the words of some of the younger members of the ANC, nationalisation of the mines is not in any way or form government policy. The lack of ambiguity of his statement is vital. It supported statements that minerals minister Susan Shabangu had made weeks earlier. Between mid-2003 and late 2009, the volume of minerals dug out of the ground in SA contracted by 4%. Since 70% of SA exports are commodities or beneficiated commodities, it is not surprising the trade balance plunged into deficit through 2004 and, with the exception of last year's recession, has been there ever since. Though the strengthening of the rand in late 2003 and 2004 no doubt played a role, the ability of other commodity countries to expand production despite stronger exchange rates shows there were other factors at play in SA. The two biggest obstacles were transport infrastructure and the regulatory environment. Transnet's shortcomings are well known. On average, Transnet's rail costs are three times those of Australia. And the bigger issue is poor efficiency and lack of capacity on major lines, except the iron ore line. For example, Richards Bay Coal Terminal plans to get its coal capacity to 91 Mt by 2014. Transnet is talking only 81 Mt of rail capacity. There is a similar issue with manganese. In many ways, the bigger issue is the regulatory environment. The requirements and tenure provided by the Minerals & Petroleum Resources Development Act are in line with global standards. The problem has been that the interpretation of the legislation has often been murky, inconsistent and slow. In late 2006, several mining companies took the then minerals & energy department to court over the prolonged delays in processing mining rights applications. The processing time has since declined, but remains slow by international standards. The other problem, as one SA government bureaucrat noted, is that the current mining rights legislation gives bureaucrats too much discretion. This has created prolonged delays - and opened the door to bribery as applicants opt to "pay extra" to have their application pushed to the front of the queue. Mining investments require a long-term horizon. Therefore clarity on security of tenure is vital before investments can be made. In general, SA ranks high for its property rights. The recent international property rights survey ranks SA in the top quintile at 24th globally - the top-ranked emerging market if we rate Hong Kong and Singapore as developed. Of the three broad components the index measures, SA scores well on physical property rights and intellectual property rights. The main weakness is the legal and political environment, where SA ranks 45th. This is still in the second quintile, but it did drop from the 2009 survey. This pattern ties in with the mining regulation - good intentions, good regulatory framework, but poor implementation. The willingness to meet a range of stakeholders and the increased communication by the current cabinet marks a significant departure from the Mbeki administration. The new openness has created a fair bit of goodwill among investors. To sustain that, all the grand intentions need to be translated into actions. One key area is that the backlog in mining applications needs to be resolved - preferably before Zuma's next state visit. Moola is a director with Macquarie First South