Mining Nationalisation Pre-mature – Netshitenzhe

by Sep 8, 2010All Articles

7 September 2010

A strategic national plan for the mining sector needs to be developed before looking at nationalisation of mines, Joel Netshitenzhe, executive director of the Mapungubwe Institute of Strategic Reflection (Mistra) said on Tuesday.

“To pose that question now [nationalising] I think is to miss the point,” he said, addressing the Mining for Change summit in Johannesburg.

“The level of state participation… will be informed by the effectiveness of the mining sector strategy arising out of a compact among all players,” said Netshitenzhe, who is also a member of the ANC’s national executive committee.

“What the country needs is a comprehensive mining strategy.”

Nationalisation of South African mines was expected to come under discussion at the ANC’s national general council (NGC) later this month. The ruling party’s youth league, resolved at its own NGC last month to push for it to become ANC policy. ANCYL president Julius Malema would address the summit later on Tuesday.

Netshitenzhe said all interest groups in the mining sector should “knuckle down” and develop a mining vision, rather than “wait on the sidelines” and criticise the strategic plan developed by the national planning commission. Black economic empowerment should be “subsumed” to the objectives of the country’s mining strategy.

“Ownership should not be treated as an end in itself, but a means of promoting the strategic imperatives,” he said, adding that state ownership should be informed by the strategy.

“The [mining] charter along with… the beneficiation strategy, the recent announcement of the Minister [of Mining Susan Shabangu] on licensing and other policy… have the potential to take the industry to a higher trajectory, but they need to transferred to coherent strategy.”

The strategy was long overdue, and should have been formulated “by yesterday”.

South Africa’s mining industry had an important role to play in the global economy.

“South Africa can become as important to the world as the Middle East is today.”

The sector could act as a “catalyst” for a “new wave” of industrialisation in the country and had the potential to “catalyse” economic recovery.

However, there were problems, including uncertainty over the regulatory environment, which Shabangu sought to address recently.

What was needed, said Netshitenzhe, was a change in the mindset of all players in the sector.

Other weaknesses which need to be tackled included the “counter intuitive tendency of declining investment in the context of the commodity super cycle”, and not enough engineers and artisans.

Further difficulties included a need to counter the “residual mutual suspicion” between the private sector and the state. Netshitenzhe quipped that perhaps a mining Truth and Reconciliation Commission was needed to get to the root of this suspicion.

Another difficulty was ensuring a licensing system that was “competitive and transparent”, preventing “squatting” – acquiring licenses and failing to mine — and ensuring that the windfall during boom periods were shared “equitably”.

Mistra describes itself as an institute combining research and academic development, strategic reflection and intellectual discourse. – Sapa


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