INDEPENDENT RESEARCH commissioned by the African National Congress party on the controversial issue of nationalising South Africa’s mines has rejected the idea in favour of higher taxes on raw materials exports.
According to Business Day newspaper, the research team submitted its report to the ruling party. It is expected to be discussed by the ANC’s national executive committee at the weekend, and widely distributed in the months thereafter.
The respected business daily attributed its information to a “reliable” source. The nationalisation of mines has been a contentious issue in South Africa since ANC youth league leader Julius Malema – who is appealing his suspension from the party – and his supporters began calling for it to be adopted as government policy a few years ago.
The youth league has maintained that the government should take over at least 60 per cent of the country’s mines, without compensation, as a way of uplifting South Africa’s impoverished masses.
South African president Jacob Zuma said in a state of the nation address last February that the country’s untapped mineral resources were worth an estimated $2.5 trillion (€1.9 trillion).
Those opposed to the policy say it is unworkable, and the debate is scaring away much needed foreign investment into a sector that has been shrinking for a decade. It is now smaller than during the apartheid era.
The report is said to discourage land and asset grabs because it is unconstitutional, and the notion of buying stakes in mines has been dismissed because the government cannot afford it.
Instead, it apparently recommends an upwards revision of royalties and tax regimes. The report is also said to recommend adding value to raw materials, which was recently adopted as the government’s beneficiation policy, and the introduction of higher taxes for firms that export raw materials.
Although the ruling party gave in to youth league calls to investigate nationalisation in a South African context, senior government ministers have repeatedly said it is not ANC policy.
Opponents of nationalisation will now hope the research findings bring the contentious issue to rest. The three researchers who compiled the report visited a dozen mining sectors in countries across the world, including Australia, Brazil and Botswana.
If the party approves the report at the weekend, a final policy decision will be taken at the ANC’s elective conference in December.