Posted February 8, 2011
By Agnieszka Flak
Nationalising South Africa’s mines is “not the option”, Mines Minister Susan Shabangu said on Tuesday in her strongest comments in a year against an idea that has unnerved investors in Africa’s biggest economy.
Under pressure at a mining industry conference to counter radical elements in the African National Congress (ANC) who want state ownership of the mines, Shabangu reiterated that nationalisation was “not currently policy”.
But she then went on to say nationalisation would mean South Africa missing out on a global commodities boom, just as it did for most of the last decade when prices soared and mining in countries such as China, Brazil and India posted huge growth, while investment in the industry stagnated in South Africa.
“Is nationalisation going to give us jobs? No. We have got to make sure that we become responsible and we attract more investments, because we do need investments in South Africa,” she told a news conference.
“We have a boom in the mining sector. We can’t afford to miss this opportunity. We lost it the last time. It cannot happen again,” she said. “I still believe, I feel very strongly, that nationalisation would not be the option for South Africa.”
For years the pillar of white economic power, mining accounts for 8% of South African GDP and directly employs more than 500 000 people, but it has struggled to adapt and grow since the end of white-minority apartheid rule in 1994.
In the last few months, the government has placed it at the heart of plans to tackle 25% unemployment, although most of its ideas involve more, not less, state involvement, leading to scepticism it will be able to turn the industry around.
‘Road to ruin’
Earlier, global mining giant Anglo American piled the pressure on the guardians of the world’s fifth biggest mining economy not to heed what it said were “false prophets” whose ideas threatened investment and growth.
“Mining companies simply will not invest if they cannot be assured that the assets they create will be secure,” Anglo chief executive Cynthia Carroll said. “In ignoring this truth, the false prophets who argue for nationalisation are advocating the road to ruin — a path we must not follow.”
ANC Youth League leader Julius Malema has spearheaded the drive over the last year to nationalise South Africa’s mines, which remain overwhelmingly owned and run by white people despite an ANC push for “transformation” to greater black involvement.
The notion was even tabled at a major ANC policy meeting last year. Senior figures from Shabangu to President Jacob Zuma have failed to slap Malema and his backers down, suggesting the idea may have some traction in the corridors of power.
At last year’s mining conference, Shabangu said nationalisation would not happen “in my lifetime” but softened her tone under the guise of ANC protocol.
Uncertainty about nationalisation and affirmative action policies to boost black ownership of the industry have caused mining investment to stagnate since 2000, although South Africa remains the world’s biggest platinum and number three gold producer.
The industry has also been plagued by a series of controversies in the administering of mining and prospecting rights, although Shabangu said on Monday a planned overhaul of the system would eliminate corruption and blunders. — Reuters
*Posted on http://www.mg.co.za