Fin24

ANC proposes changes to mining sector

2012-02-05 11:41

Johannesburg - An ANC report on the mining industry rejects nationalisation of the sector, but nevertheless proposes fundamental changes, City Press reported on Sunday.

Nationalisation would be unaffordable, as the government would need to raise R1 trillion to buy out listed mining companies, according to the report. This exceeds the entire government budget.

The proposals include a 50 percent tax on the sale of mining rights to prevent speculation. A windfall tax of up to 50 percent on super-profits, defined as a return on investment of 22 percent, is also included.

However, the royalty tax would be reduced from four to one percent.

Five ministries -- trade and industry, mineral resources, public enterprises, economic development and science and technology -- would be merged to form a super-ministry in charge of minerals governance.

Platinum, a strategic mineral, would be nationalised via "targeted interventions", while the government would participate in the industry to a much greater extent, the weekly reported.

The proposals were likely to be adopted by the national executive committee of the African National Congress, to reassure investors concerned about the prospect of nationalisation, City Press suggested.

Suspended ANC Youth League leader Julius Malema was the party's most vocal advocate of putting control of the country's mines in government hands. It was adopted as a resolution at the youth league's conference last year. The ANC then commissioned a report into the viability of doing this.

Comments
  • Zion - 2012-02-05 16:49

    Do I detect an air of reasonableness? Where the mines are not just going to stand aside to allow the state to carry on in their own incompetent and inefficient way. Why does the taxpayer realize that a state takeover will cost billions and not the Government? Will the current mining managements be just lackeys to the state or will the mine managements be replaced by a management a'la Aurora? (Has Aurora paid its workers yet?) It seems the government will rather listen to an uneducated youth leader. (ex)

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