Business Day
*Mine union says policy uncertainty is deterring investors**Alistair Anderson, Allan Seccombe and Livhuwani Mammburu, Business Day, Johannesburg, 15 October 2011*
THE debate on the nationalisation of SA's mines was discouraging investors, the National Union of Mineworkers (NUM) warned yesterday.
Research commissioned by the African National Congress on state involvement in the mining sector is due this year, but a decision will only be taken next year, allowing those in favour of nationalisation to keep motivating for its adoption as government policy.
NUM president Senzeni Zokwana said the confusion created by the debate was causing a decline in investments into SA.
"Those who run (investment) funds look at a number of factors before they venture into investing those funds," he told a press conference in Johannesburg yesterday.
"In all the meetings the NUM has attended with investors locally and abroad, the fact that this policy formulation has not been clarified has been a concern.
"I understand that if you are investing somebody's money, you should be careful that you do not plant it where there is uncertainty. You have to make sure that the investment is safe."
The union's general secretary, Frans Baleni, said in an interview yesterday that he was "anxiously" awaiting the outcome of the ANC's research into nationalisation. But, for now, the NUM was unsure whether it favoured the nationalisation of mines or not.
It wanted a mining industry and, in turn, a country that served South Africans better, Mr Baleni said.
"People will react badly if you continue to have mining communities who are not seeing any benefit from the mining operations where they live. We need to see better hostels and raw materials can no longer be extracted without any degree of beneficiation."
Roger Phillimore, chairman of Lonmin , agreed yesterday that the status quo was not sustainable.
"The mining industry must become a player in addressing inequalities. Right now, there is a lack of willingness from mining companies to serve the communities where they mine," he said.
Mr Phillimore said while Lonmin recognised nationalisation was a matter for the elected government to decide, his company could not subscribe to that view.
"It seems to us at best debatable that SA can afford to acquire ownership control of the mining industry, and --- if it did --- whether the change of control would provide more efficient operations, yielding greater benefits for employees and other stakeholders, while still generating the capital necessary to fund the investment let alone increasing production.
"It is an inescapable fact that there is a world shortage of technical and managerial skills in the mining industry and it must be expected that nationalisation would be seen as a major disincentive by many incumbents.
"Similar considerations apply to the providers of capital, both domestic and foreign. The role played by foreign investors in the historic development of the South African mining industry should not be overlooked, especially at a time when one of the present government's most significant imperatives --- the creation of many tens of thousands of new jobs --- will require substantial private fixed investment if it is to have any chance of success."
Mr Baleni said although the mining charter was in place, there was a lack of willingness by companies to meet its targets. Local and international companies had "behaved to the same degree in terms of meeting targets" --- which was not "awfully" but "inadequately".
"We need to see the suspension of licences and penalties imposed on companies which do not comply with targets," he said.
"If you look at the employment equity target of 40% at all levels, you see mining boards and management being lily white. This is because miners are clubs of friends. Their people are schooled together and they stick together."
Regardless of the content of the ANC's report on the nationalisation, the NUM would be "pragmatic in changing the mining industry", Mr Baleni said.
"We are not trying to satisfy just one group. We can't be reckless. It (mining policy changes) cost the prime minister of Australia his job," he said.
Econometrix economist Tony Twine said he did not expect mines "or anything" to be nationalised while SA was trying to attract foreign direct investment.
"The debate will continue, but whether it will gain momentum next year is unclear. It looks doubtful. The pro-nationalisation lobbies have lost a spokesman in Julius Malema."
Mr Malema, president of the African National Congress Youth League, received a five-year suspension from the ANC last week.
Mr Twine said nationalising mines would be a difficult and delicate process."Civil servants would be worried about their pension funds which are invested in mining. The JSE is dominated by mining companies," he said.
"It takes time to change economic policy, but to nationalise mines would be to change the business landscape completely."
As much as 40% of the JSE's valuation is made up of resource companies. *From: http://www.businessday.co.za/articles/Content.aspx?id=158653* ** ** ** ** -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. All you have to do is to send an e-mail to this address (repeat): [email protected] .
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