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Nationalising mines 'not on the table'

4 November 2011

Nationalising South Africa's mines is neither government policy nor the policy of the ruling African National Congress (ANC), says Mineral Resources Minister Susan Shabangu, adding that the government is committed to promoting the mining industry to achieve both industrial growth and social transformation.

Speaking at the Deutsche Bank's 8th Annual BRICS Metals and Mining Conference in London on Wednesday, Shabangu said it seemed that repeated assurances from herself, the government and President Jacob Zuma "have not yet removed investor concerns in this regard.

"No matter how often our government states the obvious - that nationalisation is neither South African government policy, nor is it ANC policy - the controversies and potential fears do not seem to disappear."

Balance between poverty alleviation, economic growth

The minister said responsible political leadership needed to strike a balance between the needs of the society, especially the poor, and sustainable approaches to economic development and growth

"It is evident that there are serious social and economic reasons that have given rise to the debate about the merits or otherwise of nationalisation. It is a fact that the prevalence in our country of the evil triplets of poverty, unemployment and systemic inequality invariably leads to despair, suffering, and widespread socio-political discontent.

"Policy controversies and political reactions to such critical issues are bound to push for the extremes with regard to policy positions - be they the occupation of financial centres or the nationalisation of natural resources," she said.

Shabangu stressed the importance of the harmonious co-existence of communities and the mining industry.

"We have to work together with the mining industry to resolve tensions that exist between communities and mining companies, and this we must resolve ... with the full consideration for the welfare of the communities and workers."

'Exciting chapter' in South African mining

Shabangu said South Africa had embarked on an "exciting chapter in the mining sector", as the Cabinet had approved a beneficiation policy framework, and the Department of Mineral Resources was currently finalising a beneficiation action plan in consultation with all affected parties.

Shabangu said that in order to address the lack of adequate mining support infrastructure - be it electricity, roads or export logistics at the ports - the government had made large investments, and a Cabinet commission had been set up to ensure the timely implementation of a national infrastructure programme.

"Whilst this is our short-term intervention, our National Planning Commission is set to release its medium-term programme of infrastructural development later in November," she said.

"The urgent elimination of the infrastructural bottlenecks remains our topmost national priority. As you know, President Jacob Zuma himself is chairing the Cabinet commission that is mandated to deal with infrastructure issues.

"We are therefore resolute in our commitment to the promotion of our mining industry to achieve both industrial growth and social transformation. These parallel goals we will pursue via a process of continuous consultation with the affected parties, including the mining industry."

Administrative reforms

The minister also noted the formation and work of the Mining Industry Growth and Development Task Team (MIGDETT), which was established at the outset of the global financial crisis in 2008.

Through MIGDETT, the government has developed a medium-term growth and development strategy for South Africa's mining sector.

"This process has, amongst others, identified a number of changes and reforms that our mining legislation (the Minerals and Petroleum Resources Development Act) requires for the ease of administration and the prevention of multiple interpretation of the Act.

"In this way, we will remove all ambiguities, and ensure a more efficient regulation of the licensing system. We are confident that when such reforms are made, issues such as the partitioning of mineral rights will be made possible."

The government was also working towards creating a single window for processing mineral rights as well as the associated environmental authorisation and water licences. This would ease the administrative processes both within the government as well as for mining companies.

Shabangu said these efforts demonstrated that the government listened to the investment community and would assess and implement whatever measures were in line with national interest.

It also showed that the government was implementing initiatives aimed at improving its administrative operations, which would go a long way to help South Africa regain its global competitiveness in the sector.

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