South Africa mining nationalisation debate hurts investment – government adviser


South Africa’s debate on the question of nationalising mines is discouraging investment, but the policy will be clear by mid-2012, an adviser to mines minister Susan Shabangu told reporters on the sidelines of a mining conference today.

“The matter will be put to bed by July next year when the ruling party holds its policy conference whereupon the issue will be debated, discussed and perhaps will be adopted or not,” adviser Sandile Nogxina said.

Earlier in the day, Nogxina said a task force set up by South Africa’s African National Congress (ANC) party to look at nationalising the country’s mining industry was scheduled to report its findings by the end of 2012.

But Nogxina made clear that the task force will not be developing a policy on nationalisation.
“Nationalisation is not policy for South Africa and there is no government process that is formulating a policy on nationalisation,” he said.

Uncertainty on the role of nationalisation in South Africa will likely keep investors worried until the issue is resolved.
“As long as the debate continues and as long as it is not clear as to what the ultimate outcome of this process is going to be, I believe that there will always be some concern… and I believe it is justified,” Nogxina said.

The comments came as ANC Youth League leader Julius Malema, an outspoken advocate of mine nationalisation, faces a party disciplinary hearing.

On Tuesday, South African police used stun grenades and water cannon to disperse thousands of Malema supporters.

Malema has no direct policy-making power but is one of the ANC’s most popular politicians and has won admiration among millions of poor South Africans and alarmed investors with his calls to nationalise the mines.

Some in South Africa fear nationalisation could bankrupt the country and destroy its credibility among investors. But the idea resonates with the country’s poor black majority who see it as a way to spread the wealth from a sector that grew powerful along with white-minority apartheid rule.