Nationalisation of mines the debate continues

The National Union of Mine Workers (NUM) has criticised ANCYL President Julius Malema on his recent statements where he said mines that resisted nationalisation will have their operations disrupted. The union has warned his statements could damage the way international investors view the country and threaten the job security of tens of thousands of miners. The ANC has decided to research the nationalisation concept properly before its 2012 conference.

The African National Congress will study a proposal that the state should take greater control of the country’s vital mining industry, President Jacob Zuma recently told more than 2 000 delegates at an ANC policy review meeting. “We will undertake research in this regard as part of the recommendations to the national policy conference in 2012.” However, senior party officials including Zuma said nationalisation was not ANC policy.

In his final address to the five-day conference the President also said, that the ANC “will also look at existing solutions, for example the fact that mineral resources already reside with the State according to law”. He pointed out that “mineral and petroleum wealth are recognized by law as national assets, a common heritage that belongs to all in South Africa, with the state as a custodian.”

Investor confidence in the mining industry has been assaulted over the past two years by repeated calls for nationalisation by the ANC Youth League and its President Julius Malema. It has been further eroded by uncertainty around mining rights, especially after the saga of Arcelor Mittal´s iron-ore rights, and Lonmin´s loss of the right to mine associated products apart from platinum to politically connected individuals and empowerment groups.

The increasing prominence of the nationalisation debate as championed by Malema, is suggestive in several ways. First, it intimates that the Malema´s clique in the ANCYL and its mentors in the ANC are properly prepared to use state power in the pursuit of personal objectives. What personal ambition are Malema and friends trying to satisfy through nationalisation? According to the Sunday Times a consortium backed by Malema was frustrated in a deal to acquire part of the 40 percent of ASA Metals (owners of a potentially rich chrome mine) held by the Limpopo Development Agency, a government entity which is partner to Sino Steel, owner of the remainder of ASA.

Black economic empowerment legislation was designed to enable the broad participation of the poor black majority in the traditionally white “commanding heights” of the economy. In reality, it has become the preferred route to riches for the ANC elite while the majority continue to struggle. Having failed in the BEE accumulation strategy, critics like the Sunday Times suggest, Malema is now touting nationalisation as a means to self-aggrandisement.

South Africa is among the world’s largest producers of gold, platinum and chromium. The mining industry brought in 43 Billion Dollar in 2008 and is the economy’s largest export sector.

– Lupo Pooth