Shabangu: ‘No quick fix’ on nationalisation

[] — MINES minister, Susan Shabangu, provided further evidence government had shifted in its strategy for tackling calls for mining sector nationalisation – previously ruled as “not policy’ – saying the matter was a “balancing act’ where there would be no “quick fixes’, nor the “termination of uncertain processes’.

Shabangu said in February, 2009, that nationalisation would not occur in her lifetime. This was after the ANC Youth League had vigorously called for its adoption. As recently as May, Shabangu told investors at a conference in Toronto that nationalisation was not a feature of government’s agenda.

Now, however, speaking at a presentation in Sandton organised by newspaper, “The New Age’, Shabangu cited findings of the National Planning Commission which found that only 41% of economically active South Africans were employed.

“There you have it, ladies and gentlemen. It should come as no surprise that the youth are impatient,’ Shabangu said. “What do you expect from them when our economy cannot absorb them into the labour market.’

Statistics of this ilk underpinned the “evil triplets’ of poverty, inequality and unemployment that Shabangu said was the duty of the mining sector to help remove.

“It is my considered view that the industry is engaged in a wrong debate,’ said Shabangu regarding nationalisation. “We should rather find answers to the question: “How can we eliminate the evil triplets?’’

Shabangu warned mining companies against resorting to the Constitutional Court amid the threat of nationalisation, saying that this wouldn’t help the condition of the communities. Instead of dismissing nationalisation, attention ought to be given to how the private sector could actively embrace the labour and social labour plans ultimately enshrined in the Minerals and Petroleum Resources Development Act (MPRDA), currently under amendment.

“I am aware that the investors, and equally members and supporters of the ANC who want to see investments and jobs in the mining industry, will be disappointed because they want clarity and certainty,’ said Shabangu of her reticence to provide her own views on nationalisation. The debate, however, was a feature of South Africa’s hard-won democracy, she added.

“Autocratic societies are efficient in concluding or suppressing debates. As a member of cabinet, I am ever mindful of the need to abide by government policy whilst at the same time deepending our constitutional democracy even if this means no quick fixes and no rapid termination of uncertain processes.

“I submit that this is one of the central balancing acts that we as South Africans have to cultivate, with patience’.

State-owned mining company

Shabangu urged the private sector to change its tone and content of its response to the nationalisation debate. “Do not attack the messenger or allow the texture of your response to degenerate into personal and personality battles,’ she said.

There you have it, ladies and gentlemen. It should come as no surprise that the youth are impatient

In a suggestion of where the South African government may take nationalisation of the sector, Shabangu said the key question was how the state’s fiscal capacity be improved while simultaneously improving the working conditions of miners.

“Gone are the days when the mining contribution is measured only by its contribution to the GDP, or royalties that it pays to the fiscus. We need to ask the question what exactly is the direct impact of GDP growth or royalties on a specific community located in the proximity of mines,’ she said.

She also alluded to the position of African Exploration Mining and Finance Corporation (AEMFC), or the state-owned mining company, which was in the process of being hived off from the Central Energy Fund “. so that it can become an independently operating entity’. Most crucially, however, the AEMFC was in the process of building “. on the example of entities such as the IDC [Industrial Development Corporation] . and others’.

Speaking to Miningmx after the presentation, Shabangu said AEMFC had already received expressions of interest from mining companies that it become a co-investor in certain mining projects. She added amendments to the MPRDA which would remove gaps in the legislation such as uncertainty regarding the ownership of associated metals, for instance, would first be open to public debate.