Business

Mining sector wants conversation on nationalisation

Jenni Evans

The nationalisation debate will remain unless the mining industry gets the support of people living around mines, says Mintek CEO Abie Mngomezulu.

Mintek CEO Abie Mngomezulu says the nationalisation of mines will always be a stone in the industry's shoe unless it addresses the problems in mining communities.

"Without having those communities on our side, we will always have those problems of nationalisation," he said at the Mining for Change seminar in Johannesburg on Tuesday.

In the past, mines went to rural areas, erected a shaft, built hostels, bused in men and provided food and accommodation.

This later changed to a housing allowance and food rations, but expectations of paternalism remained.

It set off the current mushrooming of squatter camps around mines, because people still expected this support from mines. Families living around mines watched outsiders come in and get jobs, when their own children, even if they had qualifications, could not.

"And we think those children won't fight for nationalisation? I don't think we will be in a better position going forward until we resolve the problem of the communities in the mining areas."

The example of the Bafokeng – who are in empowerment agreements with mining companies operating where they live in the North West – should be looked at, he said.

'Selfishness of the state'
ANC MP Faith Bikani, who serves on Parliament's portfolio committee on mineral resources, said the ANC's policies were not about the "selfishness of the state".

"The principal objective is to transform mining to serve all," she said.

On a recent visit to a mine in the Free State, she found there were still single sex hostels for women miners, who were breadwinners with families, in spite of commitments by the human settlements department to meet companies halfway with housing provision.

The actual meaning of "nationalisation" – whether it was 100% state ownership or not – also needed to be decided.

"It's about how we understand nationalisation. If we just talk about the state nationalising mines, it's not possible. We are not in a position to afford it."

On Friday, at the conclusion of its policy conference, the ANC said it had decided not to pursue the nationalisation of mines, but to move towards greater state intervention.

More needed
Anglo Gold Ashanti CEO Mark Cutifani said the ANC had managed the discussions well, but more was needed, and the industry had to be involved.

If it did not participate, it would have only itself to blame later.

Until the threat of losing ownership of critical assets was removed, investors would be scared of a full commitment, he said.

Business Day reported that Fitch, Moody's and Standard & Poor global ratings agencies had given their credit ratings for South Africa a negative outlook, which meant the next move could be a downgrade.

Fitch reportedly cited the "failure to put a nail in the coffin of nationalisation" as a reason.

The 'n-word'
Cutifani said: "The 'n-word' is really a symptom of another conversation, and the real conversation is really around social benefit."

On a recent trip to Guinea, he found that although 10% of the local community was employed because of the mines, the prices of goods and services for the rest of the community had risen because of the mining activity.

Roleplayers had to find a way of making sure the rest of the community was also better off.

This involved more discussions with them on finding out what they wanted, and training them to ask the right questions.

The mining industry contributed 45% to global GDP and was one of the few industries with the capital available to develop infrastructure such as roads, which helped communities.

Companies, governments, institutions such as the World Bank and the International Monetary Fund, had a chance to work together to provide an infrastructure strategy that could be adopted in Africa, instead of aid.

"We just need to have the conversation," he said. – Sapa

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