NewsSouthern AfricaANC clarifies SA mines nationalisation, new rules proposed

Wed,03Sep2014

Posted on Thursday, 20 December 2012 16:54

ANC clarifies SA mines nationalisation, new rules proposed

Nationalisation of South African mines could cost more than R1 trillion/Photo©ReutersSouth Africa's ruling African National Congress (ANC) has ended speculation on the nationalisation of the country's mines after its conference resolved that the contentious issue is "off the table".

The 53rd ANC conference in the city of Mangaung this week not only elected a new leadership but also discussed key economic, social and political policy issues.



 

The thorny issue of the nationalisation of mines has been the Achilles heel for the ANC after its former youth leader Julius Malema started openly challenging President Jacob Zuma.

But after several days of heated debate at the conference, the party was clear that nationalisation is not the route.

The ANC's economic transformation policy commission headed by Malusi Gigaba said "the national conference has refused to be drawn into the word nationalisation."



"The issue of nationalisation as we have discussed it over the last few months is off the table," Gigaba said.



He said the "conference was eager we provide final clarity on the issue". 

However, Gigaba said there would be "strategic nationalisation" where necessary.

"As is the case with all other economies, there may come a moment where a particular sector might need to be nationalised for a specific reason," he said.

The ANC said "scientific evidence" was needed to determine whether a sector needed to be nationalised.

"The state will increase state ownership in strategic sectors where deemed appropriate on the balance of evidence," the party said.

Gigaba said delegates had resolved that there was need to make state-owned enterprises effective. Transforming them would be a "key" factor in development, he said.

The ANC said "at the forefront of state intervention is the strength of the state mining company".

"The state must capture an equitable share of mineral resources through the tax system and the conference also decided that that there needed to be a review on strategic minerals," reads part of the resolutions.

The conference also resolved that a "review of mining companies" was needed to determine whether they complied with the mining charter.

Earlier this year, ANC's national executive committee commissioned a report exploring the issue of nationalisation and what it would mean for the country.

The report, however, abandoned the notion of nationalisation of mines, saying it would be too expensive to acquire all listed and non-listed mining companies.

This would cost more than R1 trillion, which the government could not afford.

The report also looked at different case studies of governments that have intervened in the extractive industry, namely Brazil, Chile, Venezuela, Botswana, Namibia, Zambia, China, Malaysia, Norway, Finland, Sweden and Australia.

The researchers proposed a 50 percent tax on all "super profits" from mining companies and a reduction of royalties from four percent to one percent.



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