Froneman believes Sibanye Gold could be made attractive as both a dividend-paying investment vehicle and a medium for growth through consolidation in the local industry.
"I think the issue that South Africa has to trade at a discount is absolute nonsense," Froneman says. He rejects the notion that even the higher cost base of South Africa's operations - aside from labour instability and perceived political risk - necessarily imply lower margins for the industry, and therefore lower comparative ratings. "But you have to list in a jurisdiction that will [give your assets premium investment ratings similar to America and Australia's]. That jurisdiction, in my mind, is Hong Kong."
"What is clear is that the market finds it very difficult to finance long-lead and higher-risk mining projects. That is where there's a need for a mining finance house, as they were in the past, to be able to fund these projects," Froneman tells Moneyweb.
Read the full article on www.moneyweb.co.za.
