S. Africa rules out mines nationalisation

Nationalising South Africa's mines is not a viable option for the country's key sector and has been ruled out by the ruling party, the mines minister said on Tuesday, in a move welcomed by industry. "We have consistently maintained that nationalisation is not the policy either of government or the ruling party," Mineral Resources Minister Susan Shabangu told delegates at a conference on investing in African mining. The African National Congress (ANC) has dismissed a state takeover of the industry, which has been pushed by the party's fiery youth league, and will adopt a policy position that is in South Africa's best interests, said Shabangu, who is also a member of the ANC's national executive committee. "We welcome the fact that the report of the ANC task team on nationalisation has reinforced the ANC's earlier decision that nationalisation is not a viable policy for South Africa," she said. "This is not a surprise, we have emphasised this before." The ANC commissioned a team of experts last year to draft a report on government intervention in the mining sector. It was presented at a high-level party meeting last weekend and is expected to be made public this month. Business Day newspaper reported on Tuesday that the report warns nationalisation would lead to a near-collapse in foreign investment and instead proposes a tax shake-up including a 50-percent tax on mining "super profits" that would pay for a sovereign wealth fund. The world's top platinum producer has been at pains to distance itself from radicals in the ANC calling for the state to take over mines and redirect profits to the millions of blacks still living in poverty 18 years after apartheid. Anglo American South Africa executive director Godfrey Gomwe welcomed Shabangu's remarks as "pertinent, reassuring and encouraging". "It is clearly important this year to resolve once and for all, in the right way, the lingering uncertainty created by the nationalisation debate," he said. "In common with the rest of the mining sector and the business community as a whole, we have made it very clear many times our strong view that nationalisation does not work and that the continuation of the debate on the topic has been damaging to South Africa's reputation as an investment destination." A policy ruling out nationalisation would end the doubt hanging over the industry, said Gomwe. "We look forward to the policy debate reaching a clear conclusion that nationalisation would be the wrong path for South Africa to follow," he said. While reassuring investors, Shabangu also took mining companies to task for dragging their heels in implementing mining policies, failing to meet social needs and for practices like fronting black partners to score points under affirmative action laws. The nationalisation debate would not have taken place if the companies had not lagged on these matters, she said. Shabangu also criticised mine bosses over safety, with 13 fatalities so far this year, despite a three-percent drop from 127 deaths in 2010 to 123 last year. "We remain gravely concerned about the continued loss of lives at the mines," she said. "The recent spate of fatalities are also a reflection of some CEOs' refusal to make meaningful changes and take personal responsibility for the health and safety issues. Some of them value profits more than the lives of the people." The platinum sector was singled out, with Shabangu saying it contributed 30 percent of all deaths. South Africa holds 88 percent of the world's platinum reserves, 80 percent of its manganese and 30 percent of its gold.