Ramp Metals stock surges on Sprott backing for Saskatchewan project
Ramp compares its project with the eye structure of the Nova-Bollinger nickel-copper mine in Western Australia.
The South African government has quashed persistent rumours about nationalizing the country’s mining industry.
AFP reports the government has no plans to nationalize its mines despite the radical rhetoric being espoused by some in the ruling ANC party:
“As we speak, nationalisation is not a policy of the government or ANC,” Godfrey Oliphant, deputy minister for mineral resources, told a round-table ahead of the Mining Indaba in Cape Town, the largest mining industry gathering in the world.
“I can’t put my head on the block about nationalisation but we are definitely going ahead with the beneficiation policy. We want a model where everyone works together, the private sector, state-owned enterprises and government, that benefits all South Africans,” he said.
While an ANC report last week stressed that nationalization would be unaffordable — the government would need to raise R1 trillion ($125 billion), more than its entire budget, to buy out listed mining companies – the party is considering other plans to increase state involvement in the sector, particularly with regard to platinum.
The New Age paper reported “proposals included a 50% tax on the sale of mining rights to prevent speculation. A windfall tax of up to 50% on super-profits, defined as a return on investment of 22%, was also included. However, the royalty tax would be reduced from four to one percent.”
Firebrand Julius Malema, the leader of the youth wing of the ANC which often acts as kingmaker in the country’s politics, spearheaded the campaign to seize mines, farms and banks last year.
Malema is never far from headlines in the country with racially charged comments but an anti-corruption police unit is probing his business dealings and last week his suspension from the ANC for “bringing the organization into disrepute” over an unrelated matter was upheld.
A closely watched survey by the Fraser Institute shows South Africa’s appeal for mining investment has declined dramatically since 2006.
In 2006 South Africa was ranked 37th out of 64 countries and territories. The country’s position has declined since then and its 2010 ranking was 67th in an expanded survey of 79 countries and territories.
The mining sector in South Africa contributes 9.6% to GDP and employs 3.1% of the country’s labour force. In 2010 the sector contributed 15.3% of country’s exports.
A Citigroup report in 2010 states of South Africa’s $2,500 billion worth of reserves, $2,300 billion resides in the platinum group metals. In dollar value Guinea, South Africa, India, the Ukraine and Kazakhstan are the countries that under-produce the most in terms of their reserves:
8 Comments
Prashantsingh
what the hell man
if nationalisation is causing so huge loss
why even think about it
Freddo61
South Africa seems to make “policy on the run’ and government is too easily distracted by minority groups when it comes to firm policy on mining. Take the case of Coal of Africa, they have been thwarted at every juncture in getting mines into production, instead of providing Employment and benefits to the National economy.It is of great concern investing in South African mining , and investment into that country will gradually diminish unless the Government demonstrate a more proactive approach and assist development for its own long term benefit.
Rasta
We should scrap the BEE, and take that money to the goverm ment. We are failing the peolple of South Africa. This things of Province is not working. We need only two divisions. Coastal and Inland Province.
Rasra
Nationalization can work, its a good model. Why are people afraid? What are they hiding? The government is the government by its people. They should ask the people who voted for them about the matter. You know why??? They are afraid to loose billions. Its going to be a war in this country one day. We are getting frustrated day by day.
Vaaldude
Sure, Rasta, .. nationalization is a good model, … albeit only in theory. To be successful in this industry, however, you also need to have all the right ” ingredients” (resources) at your disposal, eg. huge investment capital resources, expert human capital resources and extensive experience. If not, all “proposed” rationalized mining concerns will fail dismally. To mention just one example of a government intervention that has failed the people dismally, is the land redistribution exercise where hugely prosperous farming operationes were acquired by this very same government and redistributed to the formerly “disadvantaged”. Today, all of those farmes are non-producing and abandoned … (???)
Our neighboring country, Zimbabwe, is another example of the consequences of governmental intervention in business.
beentheredonethat
I was hired to work in Zambia in the early 1990’s to help repair the absolute disaster of a nationalized mining entity, ZCCM. Nationalization never works, anywhere. A healthy, competitive private sectory in a transparent tax regime does. Government is incapable of performing with anything approaching the same efficiencies as the private sector. If South Africa continues to erode its economic base, it will convert itself into just another dysfunctional state in Africa. Ironically, you can guess the year a given country gained independence (and almost always nationalized its industries) by the severity of their economic decline. Step 1 – gain indepedence. Step 2 – senior government officials steal everything they can from the nationalized industries and export the capital to private bank accounts in Europe. Step 3 – the economy spirals in a negative self-reinforcing loop. Step 4 – blame the Western World.
Deslynnehugo
WHY DON’T YOU OPEN YOUR EYES AND LOOK AT THE VERY FINE EXAMPLE OF AURORA MINES IN GAUTENG !!!!! THAT IS THE REASON WHY THE ANC WONT BE ABLE TO RUN THE MINES IN THIS COUNTRY, AND THEN GET IN YOUR CAR AND TAKE A DRIVE THROUGH LIMPOPO AND MPUMALANGA AND LOOK AT THE STATE OF THOSE PROVINCES ANOTHER GOOD REASON WHY THE ANC WONT BE ABLE TO RUN ALL OUR MINES AND THEN WHY DON’T YOU LOOK AT HOW MANY OUTSTANDING CORRUPTION CASES THERE ARE AT THE MOMENT!!!!! SO I DON’T KNOW WHO’S ASS YOU WANT TO BLOW A TRUMPET UP, BUT PLEASE DON’T TRY THE ANC IT MIGHT EXPLODE !!!!!!! AND BEFORE YOU HOP ON YOUR HIGH HORSE, YES AURORA MINES BELONG TO THE FAMILIES OF THE WONDERFUL PEOPLE WHO RUN OUR ONCE BEAUTIFUL COUNTRY AND NO I AM NOT A RACIST WHITE PERSON, JUST A STUPID SOUTH AFRICAN WHO ONCE VOTED ” ANC ”
Mario Faz
It has been proven for a long time that when, following left wing nationalistic policies with nationalization First you create a huge bureaucracy to administer the enterprises. That bureaucracy generates corruption. Corruption spreads all over the society and governments enter in an narrow path that creates political and social chaos. Too many examples all over the world has occurred in the past century. Every body knows them.
Mario Faz (Geologist)