The impact of the proposed nationalisation of south african mines on employment in the platinum sector ii abstract many forums have been recently organised in south africa to discuss the level of state intervention in the minerals sector, the expropriation of private mining companies, and the transfer of mineral wealth to the people. Regulating mining in south africa and zimbabwe law. The impact of the proposed nationalisation of south. Case study on extractive industries prepared for the lancet. Advantages and disadvantages of nationalisation connectus. Published by statistics south africa, private bag x44. Corporate media and the nationalisation of the economy in south africa. An enonomic assessment article pdf available in journal south african institute of mining and metallurgy 11. I am not going into details, as the information is freely available online, but here is a list of state owned enterprises soes and their track record. South africas anc calls for nationalizing central bank.
Pdf nationalization and mining lessons from zambia. It is little surprise that the issues of nationalisation of south africa s mines and how to accelerate land reform are expected to be contentious discussion points during the ruling ancs national. Active platinum group metals mines in south africa 9 map 4. This means the most efficient number of firms in the industry is one. In zambia 18% of the copper miners are estimated to be hiv positive ifc, 2004. The unemployment rate for the last quarter of 2010 was 24% according to statistics south africa and is back up to 25% in the first quarter of 2011, but that only counts people who are actively. This is especially true in light of his most recent talkleft walkright statements concerning nationalisation of mines. South africa hosts the worlds deepest mines, which reach depths of close to 4 km. Dec 18, 2012 south africa s government says it has ruled out wholesale nationalisation of the mining industry. Nationalization is high on the policy agenda in south africa. South africa needs urgent policy reform to save its emb. Pdf south africas gold production and reserves researchgate. Nationalisation of the mines in south africa economics essay.
This paper considers the case for nationalizing the local mining sector from an evidencebased perspective, which is derived from theoretical considerations and related to the known features of the south african mining sector and economy. An overview of producer services in the mining industry in. However, nationalisation does come at various costs. Anc study rejects nationalization of south africa mines, feb 02, 2012 a report by south africas ruling african national congress found that the nationalization of mines, as proposed by julius malema, head of the partys. This is especially true in light of his most recent talkleft walkright statements concerning nationalisation of mines, south africa is one of the worlds most. By 1986 a noticeable decline in copper production resulted in the closure of many mining units and led to the implementation of a fiveyear plan to revive the company8. Review of trends in the south african mining industry in 2005, coal and platinum group metals pgms overtook gold as the biggest revenuegenerating commodities.
The beneficiation strategy of south africa was not informed by this form of classification of sectors but merely by availability of minerals in south africa. The history of coal mining in south africa is closely linked with the economic development of the country. The mining sector and the birth of the south african economy. Ucg, overview of the south african coal value chain, october 2011 is a technology where coal is ignited. Regulating mining in south africa and zimbabwe papers in the. He went on to say that failure to be clear on policies could be an obstacle to elevated levels of foreign direct investment that are required to help lift growth rates to 7 percent. Platinum and related metals are in a growth phase, with south africa boasting around half or more of world production and reserves. There are currently 22 minerals mined in south africa. The demand was predicated on fulfilling the vision of the freedom charter, which was adopted at kliptown in 1955 as the manifesto of the liberation struggle. For a country to grow, it has to invest a least 25% of its resources keeton, 2011. Mining industry, 2015 statistics south africa the south. South africa could become less competitive with other mining giants such as china and chile, if by nationalisation, minerals arent extracted through least cost techniques.
This paper considers the case for nationalizing the local mining sector from an evidencebased perspective, which is derived from theoretical. If the shortish piece written by daniel is the only other thing that you read today, do it, suggests sasha. Mining companies globally as well as in south africa face significant challenges, putting the industry at. Constitutional court rules against coal mining in mpumalanga protected area. Abandoned mines are seriously impacting communities and is. In 2009 it looked as though coal would be able to dislodge pgms as the biggest revenue generator. Disadvantages of the nationalisation of mines are as follows. Cape town first, we had land expropriation without compensation and now, on a close reading of the effs latest draft bill, economics fundi jannie rossouw, concludes that the eff and belatedly the anc, want to follow venezuela and zimbabwe down the road to economic devastation by nationalising the reserve bank without compensation. There is tremendous interest in africa for growth opportunities due to the continents wealth of minerals and over 1,800 mining projects in various stages of development or operation in south africa alone. South african mining is a story both of triumph and tragedy.
According the draft water and sanitation master plan, high water yield areas constitute only 4% of south africas surface area and are the water factories of the country. Nationalisation to industrialise and create more jobs. The journal of the southern african institute of mining and metallurgy. Many key industries nationalised were natural monopolies. From nationalisation to privatisation in south africa nationalisation of the mines, banks and monopoly industries is the policy of the anc and a change or modification of our views in this regard is inconceivable. South africa is a mineral rich country and probably a leading mining. The south african mining landscape 6 improving value to stakeholders 18 the regulatory landscape in africa 20 south africa mining charter 21 south africa diesel refund scheme 22 tanzania the impact of regulatory changes 26 drc new mining code upsetting miners 27 financial performance 28 glossary 44 companies included in the analysis 46.
Different countries identify different strategic industries and even different strategic minerals. Lessons from, zambia article pdf available in journal south african institute of mining and metallurgy 11110. Tough choices facing the south african mining industry 1. The minister of finance mr pravin gordhan stated on march 14, 2011, that nationalisation of south africas mines and other economic assets is not government policy. South africa s ruling african national congress has adopted a resolution calling for the nationalization of the central bank and land expropriation without compensation, a senior party official. Unpacking the implications of nationalising the reserve. Nationalization refers to the process of a government taking control of a company or industry, which generally occurs without compensation for the loss of the net worth of seized assets and. The q3 2016 south african mining industry report by bmi indicated that south africa has the highest cost of labour as a percentage of total costs among the major producers, averaging around 60%, whereas peers such as the united states and australia average around 3040%. Nationalisation of mines, banks and strategic sectors of our economy as stated as one of the 7 nonnegotiable pillars of the eff remains more relevant now than ever before. A mining charter dealing with the transformation of the mining industry to assist the entrance of historically disadvantaged. Legal regulation of mining in south africa and zimbabwe. Eskom bailouts, mismanagement, corruption, nepotism.
Alternative needed to nationalisation and privatisation. A critical marxist political economy approach by mandla j. The census covers all mines that were registered for mineral rights with the department of mineral resources dmr in 2015 that are mainly engaged in the mining industry. Case study on extractive industries prepared for the lancet commission on global governance report from south africa authors. Nationalisation of mineral rights in south africa saflii. South africa has a history of state owned enterprises that havent been very successful, this would place more doubt in the mind of the foreign invertor. Dec 20, 2012 nationalisation of mines dead and buried. The report, policy gap 9 on south african coal mining. Anc study rejects nationalization of south africa mines, feb 02, 2012 a report by south africa s ruling african national congress found that the nationalization of mines, as proposed by julius malema, head of the partys. Nationalisation is high on the policy agenda in south africa. The privatisation discourse in south africa, as in most african countries, tends to be confined to the sale of large state undertakings and how much the government can get into its coffers. In south africa, hiv prevalence rates among miners vary from 25% to almost 50% in some areas ifc, 2004. What would it mean for south africa to nationalise the mines.
A perspective on the south african mining industry in the. These people solely believe in the failed capitalist system that states that the markets should be the sole determinants of the direction of south africa s economy. Jul 30, 2010 s ixteen years after the end of apartheid, a white minority comprising approximately 10% of the total population controls 80% of south africa s economic wealth. Eugene cairncross, sophia kisting, mariette liefferink, david van wyk february 20 we must remember the history of mining in south africa, of cheap black labour, racism and exploitation. Businesses in south africa have effectively been on an investment strike for some time. A storm erupted in policy circles in south africa after julius malema the leader of the african national congress youth league ancyl boldly proclaimed the need for the mining industry in south africa to be nationalized. South africas mineral profile is large and diverse, with many opportunities for international and local investors. Cullinan mine premier mine, cullinan, pretoria district. Advantages and disadvantages of nationalising mines. This is because fixed costs are so high in creating a network of water pipes, there is no sense in having any competition. Hello to alli want list of mines industries in south africa with email of each.
The research was qualitative and exploratory in nature. Nationalising south african mines stellenbosch university. Until 2012 zambia was the largest copper producer in africa but it has since been overtaken by the drc zambian mining policy has travelled the path from assets being held by privately owned companies through nationalisation during the 1960s and back to private ownership again in 2000 limpitlaw 2011. Recent calls by the african national congress anc youth league to nationalize south africa s mining industry have resurrected a seemingly neverending debate. Nationalisation of mines in south africa essay 34 words. Nationalisation as a means to accumulation path in the south african economy. South africas economy could become wealthier as precious resources would remain within the countrys borders. Nationalization is the act of taking assets into state ownership. Logistical issues, such as transport and storage could become an issue if the government has not set into place agreements and contracts with suppliers. Opportunity lost or light at the end of the tunnel report released in february 20. Specifically, it is assumed that privatisation transfers government monopolies to private conglomerates, thereby enriching a few elites. Pdf a crtitical analysis of the proposed nationalisation. Nationalisation of mineral rights in south africa 129 and must be sanctioned for a public purpose or in the public interest.
Historically, south africas mining industry has been at the heart of the economys development given the. The objective of this research was to explore the possible impact that the nationalisation and the introduction of a resource rent tax will have on the capability of platinum mining companies to create sustainable employment while remaining profitable in south africa. Existing fiscal instruments in the south african mining sector. Statistics south africa 5 mining industry, 2015 mining industry, 2015 1. However, pgms retained the top spot on the back of a stronger price recovery. In our study of south african producer services, the recurring difficulty of aggregation and disaggregation of economic sectors has further. In south africa, these measures are closely tied to the ancs historic agenda of fostering a prosperous noneuropean bourgeois class. Coal mining on the highveld and its implications for future. Aug 24, 2015 game changer for the south african economy, similar to the potential of shale gas, through the optimised use of south africa s coal resources and reserves to ensure national energy security. The nationalisation of the mining sector is an argumentative topic in our country at the moment. To put that number in perspective, that is more than r600,000 for every man, woman and child in the country. Nationalization doesnt have to cut out the private sector completely. The emotions associated with nationalisation unfortunately mean that it is difficult for people to take an objective stance in the debate.
South african corporate savings are at a multidecade high. Corporate media and the nationalisation of the economy in. Apr 14, 2014 back in the mid1970s when this writer first came to south africa to work, one of the things that seemed mandatory to do was to visit some of the countrys famous or infamous diamond and. However, temperatures of up to 60c have been experienced at the stope. The economic and technolegal realities of nationalisation. The mining sector, after nationalisation, could take a very long time to boast a profit.
What would happen to sa if mines were nationalised. Nationalisation would create panic among foreign investors. Introduction this publication presents estimates in respect of the 2015 mining census. Nationalisation in the reasons to nationalise south. Commercial coal mining commenced in the eastern cape near molteno in 1864. He refers to an opinion piece nationalization and mining. A crtitical analysis of the proposed nationalisation of mines in south africa in light of south africa s international law obligations. The discovery of diamonds in the late 1870s led to expansion of the mines in order to meet the growing demand for coal. Is the nationalisation of the south african mining industry a good. Sep 28, 2012 this will leave south africa unskilled, uncompetitive, and begging for international buyers for the now rundown mines, with nothing but ruined assets to sell. Lessons from zambia daniel limpitla wrote about a year ago, saying it is most relevant because whilst the debate around nationalisation of the mining sector in south africa is not front and centre of the conversation, it is always trending beneath the surface. It was important to understand that the south african mining sector needed fdi in order to sustain and grow the sector and that south africa was competing with a wide range of other attractive. Steering mining into the future institute of race relations.
However, there is a requirement that at least 26% of the attributable units of production of prospecting or mining projects should be held by historically disadvantaged south africans. Mining taxes in south africa at r16 billion in 2010 account for about 16% of total company taxes while mining s contribution to gdp is less than 10% figure 5. Privatisation in south africa and africa free market foundation. Some of these costs include the general operation and running of the mines, possible shutting down of the mines, as well as developing the mines. What implications would nationalization have on the global mining economy as a whole. South africa has so many amazing mineral natural resources as well a profitable welldeveloped mining sector.
The 2015 financial year was impacted by significant commodity price decreases and cost pressures, leaving the mining industry struggling for survival. To order copies of minerals and africas development. Julius malema, the controversial former leader of the youth league of south africa s ruling african national congress anc party, has long declared that the countrys key mining industry. South africa sits on an estimated r35trillion worth of mineral resources. South africa is currently engaged in a heated debate on whether to nationalize the countrys mines, the outcome of which will greatly affect the future of the economy as well as the well being of millions of individuals.
South africa is a mineralrich country and listed as the largest producers of platinum 1st, coal 3rd, gold 6th and diamonds 7th. Privatisation is the fundamental policy of the anc and it will be implemented. Privatisation and nationalisation jeanpierre dupuis national accounts and financial statistics statistics directorate organisation for economic cooperation and development oecd paper presented at the fourth meeting of the task force on harmonization of public sector accounting tfhpsa. Nationalisation as a means to safeguard sovereignty. South africa s ruling party has taken a decision to nationalise the south african reserve bank and it will be implemented, president cyril ramaphosa has said. The chamber of mines of south africa 2015 attributes the ability to mine to greater depth in south africa to a lower geothermal gradient compared to other parts of the world. Advantages and disadvantages of nationalisation may 19, 2017 may 17, 2017 by editor in chief nationalism is one of the fastest rising trends in the world, but overall, there has been stiff resistance to this movement, but regardless there is good and bad regarding nationalisation. The number of basotho employed in south african mines fell from a high of 127,000 in 1989. It is a followon from the state of mining in south africa. President jacob zuma has promised there will be greater state intervention and possibly strategic. Southern africa and east africa top this, with many countries topping over 7% growth. Strategic industries tend to be regular enough targets.
It has been argued that income from the mining sector will advance several social and economic project which include resource redistribution, transformation and job creation. This highlights south africa s domestic investmentsavings problem. The south african mining sector hanns seidel foundation. The colour of class on the copper mines african advancement in to zambianization zambian papers institute for african studies jan 1972. Should mines and banks in south africa be nationalised. Advantages and disadvantages of nationalization mining. Nationalisation in the reasons to nationalise south africa. See the zabalaza pamphlet fighting privatisation in south africa and south africa. Nationalisation to transform south africa s unequal spatial development pattern. South africa would be the nationalising of certain geological terrains or formations. Oligopolistic industries are good targets for nationalisation. Nationalisation debate may hurt sas reputation greenhill.
Cullinan mine premier mine, cullinan, pretoria district tshwane district, gauteng, south africa. Active gold, platinum group metals and coal mines in south africa 7 map 2. Nationalisation and the freedom charter south african. Recent calls for nationalisation of mines and expropriation of land without compensation have evoked a sense of anxiety and discomfort in sections of south african society, the international financial sector and observers of south africa s policy processes. We have taken a snapshot view of several mining regions across africa and share some of what is happening with regard to policy, infrastructure and funding. Kwazulunatal treasury economist clive coetzee has waded into the debate on mine nationalisation, warning that such a move would result in the collapse of south africa s economy. We have got to go through processes, ramaphosa told parliament in cape town on thursday.
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