Loading...
See More

DA: ANC wrong on mining

Jul 09 2012 16:17 Sapa

Related Articles

Government to hold mining lekgotla

Num to mull nationalisation report

Numsa: Nationalise mines, banks

Nationalisation debate will remain

Marikana miners to keep their jobs

Firms kept in dark over mines grab

 
Cape Town - The ANC appears to be choosing the wrong option again on policy decisions in the mining sector, the Democratic Alliance said on Monday.

It was no surprise to find that resource nationalism had just been identified by international accounting heavyweight Ernst and Young as "the number one risk for mining and metals companies around the world", DA spokesperson James Lorimer said.

A number of international ratings agencies had recently highlighted the same concerns, he said.

"When will the ruling party start to acknowledge the evidence and start picking the right options?"

Ernst and Young’s "Business risks facing mining and metals 2012/13" report attributed the global risk to an "expanded footprint" of resource nationalism, which often included a complex web of government interventions such as mandated beneficiation, banning exports of unprocessed raw materials, limits on foreign ownership, and super-taxes on large profits.

"These are the very things that the ANC has endorsed on the back of its ‘State Intervention in the Minerals Sector’ document released in January," Lorimer said.

"When there is a policy decision to be made in the mining sector, the ANC can reliably be expected to choose the wrong option.

"Despite optimistic reports to the contrary, the ruling party has not yet definitively decided to drop mine nationalisation in favour of its slightly less evil twin, a combination of a mineral resource rent tax and expanded state mining company."

This followed the ANC’s record of doing everything most guaranteed to shrink South Africa’s mining sector with the concurrent loss of government revenue and, most importantly, jobs.

Over the past 10 years, both the Mineral and Petroleum Resources Development Act (MPRDA) and Mining Charter had had a significant impact on the South African mining industry.

These regulatory frameworks had no doubt contributed to the fact that South Africa’s mining output in February was the lowest in 50 years, and that the industry lost 179,000 jobs between 2001 and 2011.

In the ANC’s current drive to transform the mining industry both the MPRDA and the charter fell under the broad heading "resource nationalism".

The evidence was now clear that these proposals would cause South Africa to lose even more global market share in the mining business at the very time South Africa should be seeking to gain on its competitors.

The global economic downturn, predicted to dip drastically again next year, was already threatening the long-term profitability of the mining industry.

"Along with domestic concerns of insecure electricity supply, labour volatility and ore bodies being increasingly expensive to access, the industry does not require further obstacles from a government intent only on extracting rent rather than creating jobs," Lorimer said.

"As international evidence against resource nationalism continues to mount, we wait with baited breath for a fresh policy perspective from the ANC."

*Find out the latest mining news on Fin24's Facebook and Twitter pages.

james lorimer  |  mining  |  da  |  anc
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
25 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 
 

BMW drift battle: M235i vs. speedway bike

Watch this insane drift contest with four-times dirt-track World champion Karl Maier riding a speedway bike against a BMW M235i.

 
 

Men24.com

Want to start talking dirty?
Everyday struggles of naturally skinny guys
And this year's Miss Bumbum title goes to...
How to maintain your mo, bro

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...