State mining firm a step closer

Cape Town - South Africa's department of mineral resources has completed an audit of the state's mining assets, and is preparing a proposition to cabinet to consolidate the assets under one company, the presidency said on Tuesday.

"The department of mineral resources has completed the auditing of state exposure to mining, and is preparing a proposition to cabinet to create a vehicle of consolidating all state mining assets into one vehicle," a statement from the presidency said.

Such a vehicle or company could maximise the impact and benefit for the country in line with the developmental agenda of the state, the statement said.

The ruling African National Congress party has in the past stated it would favour the formation of a state mining firm rather than nationalisaion of mines.

Last August, South Africa's cabinet approved a suspension on the disposal of mining assets held by state entities to give the minister of mineral resources adequate time to conduct and finalise an audit of mining interests held directly or indirectly by the state.

The audit was meant to enable the state to decide whether to consolidate, retain or dispose of such interests.

In Tuesday's statement, the government reiterated it does not have a policy for nationalisation of South Africa's mines.

President Jacob Zuma said last week nationalisation of South Africa's mines and other economic sectors is not government policy, at a time when the ruling party's militant Youth League has called for the nationalisation of mines, worrying some investors in Africa's biggest economy.

South Africa is the world's biggest platinum producer and the world's number three gold producer.

"The policy on minerals and mining does not make provision for nationalising mining assets, but it does not preclude the state from participating actively in mining," the statement said.

The nationalisation debate has raised fresh concerns among investors in South Africa's mining sector, where they were already grappling with the uncertainty of a recession, job cuts, dwindling profits and impending high power tariff increases.

- Reuters