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SA considers state-owned mining company

Sandile Nogxina,
Director-General of
Mineral and Energy
Johannesburg, South Africa — 29 September 2008 – The South African government is to discuss the creation of a state-owned mining company in terms of proposals which are due to be tabled before the country’s Mining Advisory Board in the near future.

Citing the country’s director-general of mineral and energy affairs, Sandile Nogxina, the Johannesburg-based Website Fin24 reported that proposals to establish a government-backed miner would go before the board, and that South Africa might also seek to replicate the actions of the Botswana and Namibia governments, which formed joint ventures with De Beers to mine diamonds.

“Some people are calling for the involvement of the state in the production of mining," said Nogxina in an interview with Fin24, “the question is how.”

He explained that there were opposing views on the proposals with “certain people frustrated by empowerment” seeking to have the mining industry nationalised, while others wanted a mining company that would take a position in so-called greenfields projects.

“I don’t think this is a negative proposal,” said Nogxina. “The sooner we do something sensible about this, the better.

The Mining Advisory Board – created under the Minerals and Petroleum Resources Development Act (MPRDA), consists of representatives of government, labour and the Chamber of Mines of South Africa.

Nogxina confirmed that one proposal was to have such a state-owned company financed by proceeds of the Royalty Bill which was due to be promulgated. The bill seeks to levy revenues of mining companies, and is scheduled to come into effect in 2009.

It’s thought the proposal for a state-owned mining company is part of the government’s attempt to restructure empowerment which is deemed to have failed in certain respects. “We don’t have a timeline on these proposals,” Nogxina concluded.  “We still have to decide on an implementation plan.”