Nationalisation? No way, says Chamber of Mines

Nationalisation is an obsolete and unsuccessful economic intervention that will hurt the South African economy, the Chamber of South African Mines said on Tuesday.

Delivering his review at the body’s annual general meeting in Johannesburg, the chamber’s president Xolani Mkhwanazi said nationalisation is scaring away investment and should be rejected in its entirety.

“It has become a most effective scarecrow in major investment communities. There are far more effective interventions that the government, in partnership with industry, can make to deliver relief to the victims of poverty, inequality and unemployment,” he said.

The mining body’s utterances come in the wake of the economic freedom march from Johannesburg to Pretoria hosted by the ANC Youth League last week.

During the march, a memorandum of demands was handed over at the chamber’s offices, calling for radical change to South Africa’s mining sector—in particular affecting a process of nationalisation within two years.

The youth body’s call for nationalisation originated in 2009 and they succeeded in forcing the ANC to debate the matter at the party’s national general council in Durban last year.

The ruling party established a task team to study nationalisation around the world and prepare a report on its feasibility in the South African context, which is expected to be completed towards the end of 2012, ahead of the party’s elective conference in Mangaung.

Huge costs
If mining houses were to be bought out by government—in line with property rights enshrined in the Constitution—cost estimates lay close to R2-trillion.

In addition, it is estimated the daily running costs for all of the country’s mines would be pegged at up to R8-million.

Government officials, including Finance Minister Pravin Gordhan and Public Enterprises Minister Malusi Gigaba, have previously spoken of the potential harm the nationalisation debate is doing to South Africa’s economic growth.

There are tentative indications South Africa’s mining productivity, with overall mineral production falling 5.1% year on year in July 2011.

“I would doubt the government has R2-trillion to buy out the mining companies and surely if they did that money could be better spent elsewhere.
They then need to run the mines after that and they already struggle to run the parastatals so where will they get the skills to run our mines? It’s a pipe dream that should be rejected as much as possible,” Mkhwanazi told reporters after his address.

The AGM, which represents mining companies accounting for about 90% of South Africa’s mineral output, welcomed the ongoing efforts by the Mining Industry Growth Development and Employment Task Team (Migdett).

Migdett, established under the authority of Mineral Resources Minister Susan Shabangu, has set about plans to create 100000 jobs and grow the mining sector by 3% annually.

The strategy is formed along a three-prong approach, whereby mining companies, government and organised labour work together to enhance the mining sector.

“We think we can do more, however we need to do this in partnership with government and labour and not on our own. This is a tripartite responsibility. We have already put the immediate processes in place with the department of mineral resources and organised labour and it shows we can achieve results if we work together,” Mkhwanazi said.

Up for debate
Mkhwanazi maintains the chamber is always open to debate on nationalisation, and would gladly engage necessary stakeholders in convincing them as to the futility of the process.

“I am confident we can put facts and logic on the table that would convince the public about the futility of nationalisation. It’s not about convincing the youth league—they seem hell-bent on this—it’s the public I’m worried about,” Mkhwanazi told the Mail & Guardian.

In response to questions posed by the M&G regarding nationalisation and the debate surrounding the matter, league secretary general Sindiso Magaqa maintains the youth body’s stance will never be swayed.

“This is a figment of their imagination that investment will be hurt by nationalisation. We want those mines back—the imperialists didn’t pay for them. We are sick and tired of this attitude from the same people who suck the minerals from this country. If needs be, we will take it by force—they must not push us too far,” Magaqa said.

Nickolaus Bauer

Nickolaus Bauer

Nickolaus Bauer is the Mail & Guardian's jack of all trades news reporter that chases down stories ranging from politics and sports to big business and social justice. Armed with an iPad, SLR camera, camcorder and dictaphone, he aims to fight ignorance and pessimism through written words, photographs and videos. He believes South Africa could be the greatest country in the world if only her citizens would give her a chance to flourish instead of dwell on the negativity. When he's not begging his sub-editors for an extra twenty minutes after deadline, he's also known to dabble in the occasional poignant column that will leave you mulling around in the depths of your psyche. The quintessential workaholic, you can also catch him doing sports on the weekday breakfast show on SAfm and presenting the SAfm Sports Special over the weekend. Read more from Nickolaus Bauer

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