Sunday, September 12, 2010

More Bad News for South African Mining Industry

Chief Junior Baboon Julius Malema is still playing with his new toy: the nationalisation of South Africa's mining industry, and shows little sign of letting it drop. In fact, the plans have been "refined", says iol.co.za:

(emphasis and comments mine)

It was a watershed week in the debate around the nationalisation of mines that is being driven by ANC Youth League president Julius Malema.

The organisation has provided more clarification on the nature of nationalisation, which it has campaigned for since it released its policy paper at the beginning of February for debate at the ANC's national general council in less than two weeks.

In its initial paper, the league just said the state-owned mining company would own 60 percent of the stake in a mining company and the rest would be held by private investors. Going by Malema's speech on Tuesday at the Mining for Change conference in Johannesburg, it is apparent that the youth league has refined its position.

He said that the mechanism for the 60:40 ratio would be used when the mining companies were applying for the renewal of their mining rights.

Malema referred to a Citigroup report of last April that identified South Africa as the biggest repository of mineral reserves in the world.

"This has been confirmed by the imperialists that we are the richest and we have become a target of exploitation by these imperialists. We know that the economy has been growing in the last 16 years but not many jobs have been created," Malema said.

[That's because mining is no longer a labour-intensive industry. It can be, but only by turning back 100 years of technological advancement. However, the jobs are created indirectly.]

"We don't want to continue exporting our raw materials. We want to improve the working conditions of the workers in the mines, their safety and their salaries. We want workers to be the first beneficiaries and the communities where we are mining."

[Right, and all fine and good - but the workers and the State are not the same thing. Julius is pulling the wool over the eyes of 'the people' once again. Introducing a minimum wage for miners would make them beneficiaries, but Julius is not really interested in that. Remember, he just wants power to be in "black" hands - i.e. his own and those of his cronies.]

Malema was quiet on whether the mining companies would be compensated for the 60 percent taken by the state.

This was left to league spokesman Floyd Shivambu to clarify. Contacted the next day, Shivambu said there would be no compensation at all.

"The private sector will bring in its contribution through the shaft and infrastructure, we will bring in our minerals," he said. [huh?]

He said the mining companies would still be required to abide by the 26 percent black economic empowerment (BEE) ownership in their 40 percent stake, and follow other pillars of the mining charter.

Shivambu muddied the waters even further by saying that the 60:40 ratio would equally apply to black-owned or controlled mining companies.

Malema backed his argument by saying the nationalisation of mines was an ANC policy, tracing it back to the Freedom Charter.

Jeremy Cronin, the deputy secretary-general of the SACP, did not share Malema's view.

He said that with the promulgation of the Mineral and Petroleum Development Act, the government appeared to take a major step forward in realising the Freedom Charter's call to restore the wealth of the country to the people as a whole.

But this was trumped by the BEE equity targets in the mining charter and a narrow BEE focus had actually set back the real transformation of the critical mining sector at the expense of job creation, industrialisation through increased beneficiation of natural resources, environmental sustainability and placing the economy onto a new growth path, he said.

Cronin argued that mining houses had exploited post-1994 liberalisation measures and pursued global corporate restructuring trends in a complex process of mergers, acquisitions, divestitures, unbundlings and liquidations. As a result, formerly South African mining houses were more integrated into international operations.

3 Opinion(s):

Luc N said...

"Malema referred to a Citigroup report of last April that identified South Africa as the biggest repository of mineral reserves in the world."

More than the rest of the world together?

I don't think so... South Africa is relatively small, it may have been better explored than some areas (Arctic, Antarctic, Congo, Tibet, etc.) but I can't think that it holds most reserves and by far. (Canada, Russia, Botswana produces more diamonds, and the US, China & Australia about as much gold I think these days)

Viking said...

I think this is the article he is referring to.

http://www.miningmx.com/news/markets/SA-richest-country-in-the-world.htm

But Malema does not understand what it takes to mine that wealth. If he and his commie thugs make it even more difficult, mining companies will find what they need elsewhere, reducing the value of SA's minerals to a big fat zero.

It's typical of those mindless populist morons to think that the wealth is just sitting there waiting for the government to take it and give it to "the people".

Mehdi said...

"Of South Africa's $2 500bn worth of reserves, $2 300bn resides in the platinum group metals."

Time to find other mining sites or substitutes