Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
It is vital for the South African government to step up and take a bigger stake in the mining industry, a top economic advisor told those attending a Mining for Change conference in Johannesburg on Friday.
The comments come one week ahead of so-called Economic Freedom Youth Mass Action marches on the Chamber of Mines and stock exchange organized by Julius Malema (pictured), populist leader of the influential youth wing of the ruling African National Congress with the support of the 260,000 member Metalworkers Union. Malema recently told crowds that the nationalization debate within the ANC is a question of how not if, and an August industry-led investigation said the ruling party is closest to seizing mines since the end of white rule in 1994.
IOL reports independent researcher and advisor Duma Qgubule told those attending a Mining for Change seminar organized by AngloGold Ashanti, Motjoli Resources and the producers of the Mining for Change documentary: “I find it disturbing that many in the private sector don’t want to have this [state ownership] debate.” Qgubule’s research shows black representation in mine ownership among the leading 25 JSE-listed mining remains at 5% versus a JSE report pegging it at 17%.
BusinessDay opines on Friday that SA’s allure as an investment destination has been further tarnished by global resources company Xstrata’s announcement that it has suspended negotiations with some workers at its South African operations, over its voluntary offer of an employee share ownership plan. The share ownership plan is over and above the company’s local ownership obligations which are already at the required 26%.
“Mines should be nationalised. Nationalisation is concluded. I don’t understand the ANC process to be saying we are investigating nationalisation of mines. I understand the ANC process to be saying we are looking to get the best model for nationalisation,” Malema told a student rally on October 5.
The National Union of Metalworkers of South Africa, representing the vast majority of mine workers in the country, on Wednesday said its support for the planned marches is guided by the 1969 Strategy and Tactics charter adopted of the ruling ANC in 1969 which says: “…it is inconceivable for liberation to have meaning without a return of the wealth of the land to the people as a whole. It is therefore a fundamental feature of our strategy that victory must embrace more than formal political democracy. To allow the existing economic forces to retain their interests intact is to feed the root of racial supremacy and does not represent even the shadow of liberation.”
MINING.com reported in August on a confidential report prepared for South Africa’s mining CEOs that said South Africa’s ruling party is closer to some form of nationalization than at any other time since the end of apartheid. A government takeover of mines could choke investments in a country with metal and mineral reserves estimated at 2.5 trillion and lead to a collapse of the currency, the rand, according to the report.
Below is the trailer of the documentary making a case for the nationalization called Mining for Change: A Story of South African Mining, that presents studio footage of ANC Youth League president Julius Malema, likening mining company owners to thieves alongside chiefs of De Beers, Lonmin and others.
5 Comments
Thames Hartley
I am surprised that it has taken so so long to nationalize the mines in South Africa. As a self avoid communist/socialist government which claimed from the beginning that the natural resources and all revenues from them belong to the “people”. The mines will go the way of of awful government management and self enrichment to the people in power and never to the “people”! Look at the countries which have nationalized oil production – the money only goes into the pockets of the ruling class. Socialism has turned into governments of banditry.
The Mafia Man
“T H ” You are so right also!! The Teamsters Union, Mafiaman…….
Avitripp
This is a brilliant idea! It will be great for the rest of the world as the already marginal South African miners will see a steady decline in profits and increasing costs. Why do the same bozos that now run the government think they can take over the mining industry? This will only assist in taking South African gold off the market, making more attractive the options for mining elsewhere. I can also see a further depletion in skilled labour and highly educated workers.
Cheadrick
Lunacy on a grand scale…. Think of all of the nationalization successes of the world! Wait I can’t seem to think of one… Pathetic!
Joe Brusse
Have never seen a government yet that could manage ANY kind of business much less an entire industry