DA: ANC wrong on mining

2012-07-09 16:17

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."

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  • joe.farmer.92775 - 2012-07-09 16:29

    this headline should read 'DA: ANC wrong'

  • kobus.hattingh.5 - 2012-07-09 16:30

    Do they ever supprise us?

      Mike.ntsh2009 - 2012-07-09 17:23

      What is DA policy. Can't they pronounce policies rather than attack policies of rival parties? It really shows that when they can rise to power, by miracle, they will keep on opposing themselves. Heads into sand!

      dewaldmontgomery - 2012-07-09 17:52

      Look on their website. Everything's right there.

      Mike.ntsh2009 - 2012-07-10 07:57

      DEwald; You just echoed my sentiments. Does DA expect poor people with no access to computer or even literacy to grasp what's posted on website to go searching for policies? Shouldn't they be pronouncing what their policies are via accessible media rather than just critisizing others?

  • christelle.james.7 - 2012-07-09 16:32

    A wise option for most decisions is always to look at historical information and forecasting as a result by the experts. Why is our government incapable of following this common practice for success.

  • NrGx - 2012-07-09 16:36

    why are the anc interested in buying the current mines which are in production. I know that there are many other mine properties for sale! Is this a case of "we want the white mans mines" or clear cut ignorance?

      NrGx - 2012-07-09 16:37

      amendment: not buying....prefer the wording of "take over".

  • ben.spreeth - 2012-07-09 16:40

    To them this is not about right or wrong but how much the cadres can get out of it.

  • Alan - 2012-07-09 16:42

    Read that again: '179 000 jobs in mining lost' - in just 10 years. And now our proven incompetent government (who cannot even run hospitals or municipalities properly) are still toying with nationalising mines??? The result will be dozens more mine closures and another couple of hundred thousand miners out of work. Just like Aurora. Voters - it's time to wake up if you value your future in SA.

      lerato.kay.3 - 2012-07-10 06:13

      I think its obvious that jobs will be lost in any industry simply due to the global crisis! How many jobs have been lost in the banking industry? Qualitatively banks have fired more people than mines by far, its reckless and naïve to blame job losses in mines to ANC policies look at the broader landscape. You will be a stupid business man if you start firing you stuff and closing shop just because you anticipate a bad policy from the government, what happened to the term going concern!

  • Mondli - 2012-07-09 16:46

    So DA you've quoted a report, fine. What we need though as South Africans are solutions, not this fault finding blame game you politicians are doing in order to look as the "better" party. What alternative is there as far as you are concerned? You blamed Vavi for disagreeing to the youth subsidy without putting foward an alternative, rightfully so, yet you do the same day in and day out. We'll then as citizens come to these forums as ANC, DA, Cope, IFP etc. followers and fight against each other over what is not even remotely the point of the matter. Please, please politicians, we need more substance from you than trying to polarise us

      NrGx - 2012-07-09 16:51

      the alternative is to buy a mine property that is for sale and begin production, proving that they can do it. as I understand, the state, have NO EXPERIENCE in mining. prove you know what you are doing before "taking over"the current WORKING mines. The current, high income mines produce a lot of income to the economy, why RISK all that on greedy politicians, which from past experiences do not and cannot manage getting out out of a brown paper bag? Question: Would you "HAND OVER" you company to an inexperienced individual and risk your income on that basis?

      Mike.ntsh2009 - 2012-07-09 17:27

      nrgx, DA never pronounced that as their policy. This is just your opinion so please read Mondli's comment properly before "ejaculating prematurely". DA is just like a dog that is good at barking at a car, but does nothing when it stops.

      Tommo - 2012-07-09 23:28

      @Mike. Im a sexologist. Where on earth did you learn that term????

      chris.cunning.14 - 2012-07-10 07:27

      @Mondli: It's difficult to fight when the ANC has majority in control. Just look at the toll saga.

      Mondli - 2012-07-10 08:00

      @nrgx, I believe "taking over" mines is not the proposed solution nor what the DA is criticising here? @chris, I get you. My point is, as an ordinary South African I am tired of this bad mouthing tactics by politicians aimed at trying to get popularity amongst us which is just patronising and an insult to our intelligence. We need them to have meaningful debates about relevant issues. Unfortunately this behaviour of theirs is rubbing off on us, just look at the bad mouthing that happens on this forum instead of meaningful debates? They are supposed to be uniting South Africans but they are doing exactly the opposite. What did Zille & Vavi say about the violence when DA marched to COSATU? They blamed each other instead of taking full responsibility for the mess because they polarised the people instead of uniting them. We deserve better from all of them!

  • rob.bayliss.94 - 2012-07-09 16:52

    The challenges are to raise the level of communication and understanding amongst the people that continue to vote for their own poverty. For as long as the majority are convinced (fooled????) into believing that they do not have any options to resist, or that their interests are actually being served by, this mickey-mouse government NOTHING can be done to halt and reverse the rot. The question 'of how to reach and engage this voting majority' must surely be at the top of every opposition party's agenda....if it isn't IT SHOULD BE!

  • Mike.ntsh2009 - 2012-07-09 17:19

    What is it constructive that DA ever come with? Why can't they talk about their policy rather than keeping on saying ANC this, ANC that? Pepsi can't keep on telling consumers about what is wrong in the ingedients of Coca-cola, not advertisng their products but still expect pepsi to be a superior brand to Coca-cola.

  • Mike - 2012-07-09 18:19

    It is difficult to comprehend how an ANC led government that cannot even provide basic education for the countries children, provide basic law enforcement and health services, can even begin to contemplate nationalizing strategic industries. It is even more difficult to comprehend the logic behind this when one considers that such an initiative would destroy their present tax based income stream. How doff can they be??

  • sello.papo - 2012-07-09 19:44

    nna im suprised lorimer james clail that we took the wrong road to nationalise our mines because he took report of his brother, if ernst and young firn are heavyweight what abt sabt acountant are they not heavy sure they are, but neither criticise this idea. Botswana is owning 60 per of mines and check only 11000 botswana citizen working in south africa. Make analysis corect.

  • lerato.kay.3 - 2012-07-10 06:01

    I find it naïve for anyone to swallow just anything because its coming from Ernst and Young. These are the same guys that failed to predict the global economic crisis, failed dismally to anticipate and identify reckless lending. When the SA gvt introduced NCA these were the same guys that cried fowl claiming that gvt intervention will distort markets but alas NCA actually saved SA from global recession! One wonders who is Ernst and Young advocating for? Because they have conveniently avoided telling us that in Australia it is law that mines are taxed up to 70% on super taxes, no minerals are exported as ore! They also failed to inform us that in Botswana the gvt owns 51% and its working like a gem, they have also conveniently failed to inform us that in other African growing economics it is law that government owns 51% eg Angola; and the same companies that are whining here are also investing there. In short SA gvt has allowed these companies to manipulate them, in Zim the gvt demanded a massive 51% stake and got it, did the company collapse?

      Mondli - 2012-07-10 08:11

      Good points lerato and excellent question, who are they advocating for? In this case, the mining companies. Their report is not about whether it works or not in countries where such policies are adopted. Like I said, we need meanigful debates than these politicians patronising & insulting our intelligence, please!

      stephen.redford.16 - 2012-07-11 13:22

      I don't understand the logic. There are so many reason why this random comparison of "stuff other countries do" doesn't work. For example in SA labour productivity on a cost per unit basis is much worse than in ZIM. SA labour is terribly expensive compared to much of Africa. How does that factor into where companies will invest ? Bottom line is that companies invest where they believe they can make the most money. The lower the margins, the lower the investment. You have to choose - lots of tax or lots of jobs.

  • lmapheto - 2012-07-10 14:03

    I like it when political parties differ using data from private companies...Suppose the DA is in government, wouldnt they want to be a super power? Contolling the major economies of the country...Its time to shut up...

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