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02 Nov 2010 15:58
Nationalisation has never been successful anywhere in the world, Chamber of Mines president Sipho Nkosi said on Tuesday.
“Simple, indisputable facts, which show conclusively that nationalisation has never been an enduring, successful system anywhere in the world where it has been implemented, are readily available,” he told the annual general meeting of the chamber in Johannesburg.
“An antiquated and discredited practice, nationalisation has impoverished many countries—several of them in Africa.”
Nkosi said the chamber welcomed the fact that President Jacob Zuma and Mineral Resources Minister Susan Shabangu had stated that nationalisation was not government policy.
The ANC’s recent national general council resolved that its leadership would investigate the issue after repeated calls for mine nationalisation from its youth league.
Nkosi pointed out that mining is a “universally tough business and not an easy route to the accumulation of immense wealth”.
The cyclical nature of mining made it risky, he said.
“The total income of the mining sector in 2009 was R332-billion, down almost 9% on 2008.”
This included interest and dividend income as well as profits made on the disposal of mining company assets.
“The industry’s total expenditure, excluding dividends, taxes and capital expenditure, was R312-billion, implying an unimpressive gross surplus of R20-billion,” Nkosi said.
“With the addition of capex, taxes and dividends, total expenditure in 2009 amounted to R399-billion. This represents a R67-billion deficit which had to be covered by making use of retained earnings.”
Nkosi conceded these dismal earnings would not be the case every year, “but it does illustrate the potential demands that could be made on taxpayers in periods of economic downturn and when mines are being managed and operated by the state”.
“The issue now resides in the ANC’s national executive committee where it will receive detailed attention during the next two years and, should the need arise, the mining industry—as represented by the Chamber—will participate vigorously and constructively in any public debate that may take place,” he said.
The Chamber is a mining industry employers’ organisation.—Sapa
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