HomeNewsANC plans Zimbabwe-style mining buyout in South Africa

ANC plans Zimbabwe-style mining buyout in South Africa

South Africa’s ruling party, the ANC has announced that it intends to table a policy proposal that recommends Zimbabwe-style ownership laws in the mining industry, which would force mine bosses to give up 49 percent of their companies to black owners.

ANC’s proposal for 49% equity in mining companies

Unlike in Zimbabwe, however, where mining companies are forced to hand over 51% of their shares to locals, the ANC’s proposal will call for the South African state to buy 49% in mining firms, which could result in a review of the mining charter if successful.

“As part of our concerted effort to radically transform the economy, it is critical that a policy that ensures that 49 percent of equity in mining companies is owned by blacks be urgently adopted and aggressively implemented,” states the proposal.

“Development finance institutions like the IDC (Industrial Development Corporation) and the National Empowerment Fund should provide financial and other support for blacks to own and run enterprises, including mines, rather than the state owning equity in them, since state intervention in itself is neither revolutionary nor Left.”

This proposal is likely to be tabled at the ANC’s provincial conference in Gauteng next month and could be addressed at next year’s ANC national general council if it gains enough support.

Focusing on economic transformation

Analysts are calling this a “subtle form of nationalisation” that seems to be a direct response to the party’s failure to provide significant economic transformation and increased frustrations about the low levels of black economic ownership.

Recently, the Economic Freedom Fighters (EFF) have been strongly calling for radical economic reforms and policies, including the nationalisation of both banks and mines, and the proposal refers to the need to consider “narrative on the alternative growth path.”

In addition to the new mining proposal, the ANC has also proposed the establishment of a state-owned bank, suggesting that the central role of the bank would be to fund black entrepreneurs, which it accuses major banks of being reluctant to do.

“This situation calls for the establishment of a state bank that will provide finance to black entrepreneurs and SMMEs as part of our push for radical economic transformation,” the proposal says.

“Since the narrative on the alternative growth path envisages a greater role for the state in the economy, be it through increased regulation, direct ownership of the productive forces and increased intervention in the economy to direct development, this allows the ANC and its partners to craft and execute programmes that ensure re-industrialisation across key sectors of our economy with the added benefit of enabling us to create black industrialists.”

South Africa making good BEE progress

Nevertheless, the Chamber of Mines of South Africa has reported that the country’s mining industry is the most transformed of all the country’s major industries.

Mike Cutifani has lauded the industry’s empowerment achievements, which saw procurement on capital goods and services from previously disadvantaged locals range from 39% to 67%, exceeding the target of 20% to 50% that was set.

Good progress is being made across all pillars of the mining charter, he said, ranging from ownership to housing and management transformation. Furthermore, over 80% of the total mining income for 2012 has been spent in the country, bolstering South Africa’s economy and growth.

Nevertheless, work stability has been “seriously damaged by the shock of the Marikana tragedy, an event that caused a little bit of the industry and a little bit of South Africa to die.”

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