Cape Town, South Africa — MININGREVIEW.COM — 05 February 2010 – Threats of nationalisation are less of a risk to the mining industry in South Africa than the lack of power in the country.
Expressing this opinion in an interview with Bloomberg News at the Mining Indaba conference here, Control Risks associate director, consulting projects, James Smither said: “We’re very sanguine about political risk in South Africa. The real risks mining companies should be focusing on in the country are number one, the infrastructure, especially power availability.”
African National Congress Youth League leader Julius Malema is pushing the party to seize mine assets to broaden the distribution of wealth in the country. The league wants the government to own at least 60% of mines, to create a state-owned mining company and to halt the issue of new mining licences until legislation is amended.
South Africa won’t nationalise mines “in my lifetime,” mines minister Susan Shabangu said at the Indaba earlier this week.
Eskom Holdings Limited, the state-owned power utility, is struggling to fund a R426 billion expansion aimed at avoiding a repetition of blackouts that hit the economy in 2008. It has applied for permission to raise power prices an annual 35% per annum over the next three years.