/ 28 May 2010

State mining an ANC figment

The ANC was red-faced this week when it emerged that a conference resolution persistently used to justify parliamentary hearings on a state mining company does not exist.

ANC Youth League leader Julius Malema was given a sympathetic hearing at the public hearings, which kicked off in Parliament this week.

When the Mail & Guardian asked the chairperson of Parliament’s mining committee, Fred Gona, why the hearings had been convened, he said they were based on a “resolution by the ruling party”.

This was a reference to an alleged resolution at the ANC’s 2007 national conference in Polokwane instructing the state to establish a mining company. But the resolutions adopted by the conference and posted on the ANC’s website do not include such a resolution, and attempts to obtain it from the ANC on Thursday proved fruitless.

Enoch Godongwana, the chairperson of the ANC’s economic transformation committee, confirmed that he could not find the resolution.

“I have also been trying to find it for a while now but I couldn’t. I checked the resolutions but it is not there,” said Godongwana, also the deputy minister of public enterprises.

The only reference to mineral resources in the Polokwane resolutions states that the state is the custodian of natural resources — including minerals, water and marine resources — on the people’s behalf and that they must be used in a way that promotes the sustainability and development of local communities and realises the economic and social needs of the whole nation. But there is no reference to the establishment of a state-owned mining company.

ANC spokesperson Ishmael Mnisi referred the M&G to the ANC’s resolutions at the party’s 2002 conference in Stellenbosch, but they also make no mention of a state-owned mining concern.

‘Wonderful document’
The committee spent the whole of Wednesday listening to Malema’s input on the issue of a state-owned mining company. Responding, MP Vusilele Magagule reportedly said: “We thank you, president, for such a wonderful document. We are very happy to have such a wonderful ANC Youth League.”

Gona said that once the hearings were concluded, the proposals would be taken to the Department of Mineral Resources for further discussion. A proposal would then be returned to Parliament to be formalised in law.

Sandile Nogxina, the director general of the department, told the M&G this week that the government planned to merge all the existing state-owned mining entities into a single fully fledged mining company.

“The state mining company will operate as a competitor to existing private mining companies,” said Nogxina.

The government would be the 100% shareholder.

He said there was also nothing to prevent the state concern from entering partnerships with private mining firms. “This is like PetroSA, which is 100% owned by the state, but can work on projects with private companies. The agreement will only be for a specific project,” Nogxina said.

The Cabinet has still to give the company the green light and no date has been set for it to start operating.

Nogxina could not say whether it was planning to buy existing mines or build its own asset base. “That decision on how to expand will be taken by the management of the company. As the government we cannot prescribe to the company on how to grow and how it should be run.”

Nogxina said there should be no fear about the overall nationalisation of mines. “Nationalisation is when you take somebody’s assets and arrogate them to yourself. Here we are talking about a new company.”

There was also no basis for fears that a state mining company would scare off foreign investors. “That did not happen when PetroSA was formed because we did not go out and take somebody’s assets,” he said.

Other state mining concerns include African Exploration Mining & Finance Corporation and Alexkor, a loss-making commercial diamond miner.