Hot on the heels of Davos, the Investing in Africa Mining Indaba provides an opportunity for the new ANC president, Cyril Ramaphosa, to send the right signals to the local mining industry and civil society to renew confidence in the sector. South Africa’s mining industry remains a critical component of the economy; a potential flywheel for upstream manufacturing, downstream beneficiation, and horizontal spillovers. If we are to address the problems of youth unemployment, poverty and inequality, due attention must be paid to reviving the mining industry. Doing so will also have positive latent effects on the health of South Africa’s political economy.

If forced to choose an exemplar for policy instability over the last decade, the Mineral and Petroleum Resources Development Act (MPRDA) would have to top the list. Formulated in 2002 and enacted in 2004, it has traversed a rocky road. It was amended in 2008, but that set of amendments was only enacted in mid-2013, a month after amendments to itself arrived in the National Assembly. The 2013 amendments were returned by the Presidency in early 2015 due to concern that they would not pass constitutional muster and may violate World Trade Organisation rules. Where exactly they are now in the passage of legislative finalisation is still unclear. The last indication was that they were due to be promulgated by December 2017; the deadline was missed. To make matters worse, the latest iteration of the Mining Charter – the blueprint for transformation of the industry – led to a fundamental breakdown of trust between the industry and the ministry. This has been suboptimal for restoring investor confidence in an industry that has been battling the headwinds of higher production costs and lower global commodity prices.

The 2016 Fraser Institute Survey of global mining companies placed South Africa 74th out of 104 surveyed jurisdictions for ‘mining investment attractiveness’, down from 57th of 112 in 2013. While criticism has been levelled at the survey because of a low response rate among mining company executives, it remains an important indicator of the health of the industry. The reality of reduced investment attractiveness is located within the broader challenge of recent credit rating downgrades to the South African economy.

With the fresh wind of optimism following the election of Cyril Ramaphosa as ANC president, and as Deputy President of the country, the window of opportunity to reverse the negative trends is here, and it may be narrow. There are at least two important issues for him to consider.

First, early signals towards policy stability are crucial to sustain the short-term pain of a stronger Rand. Ironically, the Rand’s appreciation on the back of Ramaphosa’s December victory and strong performance at Davos means lower export revenues for struggling miners. Gold and platinum are particularly afflicted, as the high marginal costs of production in South Africa make the sectors dependent on a weak Rand for their viability. Flat global prices for these two commodities – the two most important exports for South African mining – combined with a stronger Rand will cause much consternation among gold and platinum shareholders. However, a stronger currency also provides an opportunity for purchasing globally-sourced inputs at lower relative prices. This is important for future growth. Current commodity prices should not be the primary variable in the investor’s decision equation. Smart investors would do well to hold assets with solid fundamentals that underpin future demand and are located in stable jurisdictions. Stability therefore has to be established in South Africa.

Mr Ramaphosa has an opportunity to signal that the MPRDA quagmire will be swiftly addressed and that the Mining Charter will be inclusively re-negotiated in public, with industry concerns genuinely appropriated into the pact. In the process, he needs to communicate a fundamental commitment to re-establishing trust and the rule of law by doing away with excessive ministerial discretion in policymaking. Licence allocation processes need to be clearly embedded in law, for instance, to ensure fairness and recourse in the case of disputes.

Second, a clear strategy for building horizontal and vertical linkages from mining must be developed and embedded into formal policy. In the longer term, this is crucial for generating broad-based welfare. Mining can play a central role in supporting other industries that thrive beyond the life of the country’s resource endowment. Until now, talk of ‘strategic minerals’ has been too vague, and exactly what is to be done with them to foster industrialisation has been unclear. For instance, insisting that some proportion of ‘strategic minerals’ that would otherwise have been exported must be made available for local beneficiation seems to lack clear vision. Which minerals are ‘strategic’ has not been defined according to any useful criteria, and the extent to which these could feasibly be locally processed has also not been articulated.

The overarching strategy here must consider the nation’s future in a rapidly changing world. Two major components of the Fourth Industrial Revolution are the energy and transport revolutions. Renewable energy systems will require vast quantities of minerals and metals, as will electric vehicles. The latest World Bank report on the subject estimates that while coal and other fossil fuel demand will dissipate relatively soon, commodities such as copper, lithium, chrome and manganese will be in high demand. This is because they are key ingredients for renewable energy machinery and electric vehicles. As new technology costs plummet, fossil fuels are likely to become obsolete.

South Africa happens to be endowed with vast chrome and manganese reserves, among the largest in the world. We also have three quarters of the world’s platinum supply. While platinum prices are currently flat, above-ground supply for recycling will run out, creating a large supply deficit if demand for fuel cells takes off.

Therefore, South Africa’s strategy for industrialisation – to reverse the trend of premature de-industrialisation that is gripping much of the continent – has to be orientated around the requirements of the Fourth Industrial Revolution. It can also harness advances in that same revolution to move towards non-invasive mining that improves worker health and safety, and reduces mining’s typically large environmental footprint.

Upstream, this means that there are opportunities to manufacture technology-laden drones and robots specifically towards more efficient mining. Geothermal imagery from drones, for instance, is increasingly replacing the need for extensive geological drilling and sampling. Jobs that are lost to robots can be re-created upstream, though this will require dedicated re-skilling efforts.

Downstream, South Africa could exploit some dimensions of the energy and transport value chains. For instance, building crucial components of fuel cells locally, along with inputs for solar panels and wind turbines could increase the ‘value to weight’ ratio of many of our current exports.

Horizontal linkage opportunities exist in the technology sphere. Technological advances can feed into the upstream and downstream opportunities to create an upward spiral. This cannot happen, though, without a green industrialisation policy that is geared in this direction and supported by policy stability in the mining sphere. A fine-tuning of the country’s tariff regime to support a new ‘mining for industrialisation’ policy is also necessary, and will have to steer clear of the political temptations to support embedded players that are politically powerful but economically uncompetitive.

A significant window of opportunity is on our doorstep. Fresh and visionary leadership is a prerequisite for unlocking the current impasse. If investors are convinced that South Africa is on the path back towards respecting the rule of law, and dedicated to policies that work together to ensure the long-term welfare of its citizens, they will be only too glad to reflect that through investing here.

Written by Ross Harvey (http://www.twitter.com/harvross@harvross). He leads the extractive industries governance work under the Governance of Africa's Resources Programme at SAIIA. This article was first published with the Business Day.