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While left wing elements in the ruling alliance led by the African National Congress have seized on the issue of nationalising South Africa’s mining industry – and other sectors such as banks - as another opportunity to conduct their internal ideological battles and create pressure for a leftward shift by government, there is no danger of President Jacob Zuma’s government opting for any substantial form of nationalisation.
At most it may opt for “nationalising” elements of the mining industry, as has already been done in respect of mineral rights. This could possibly include such steps as creating a state-owned mining company to compete with privately held mining companies and which could, for example, facilitate black economic empowerment in the sector, or could take control of abandoned or disused mines that are currently the scene of deadly illegal mining operations.
But there is no danger that existing privately owned mining companies and their operations will be nationalised. The same goes for South Africa’s banks – especially given the mess in which the state-owned Land Bank finds itself – or any of the other “commanding heights of the economy”.
Something of a panic was started when the president of the ANC Youth League, Julius Malema, who has an established reputation as a political loose cannon with a penchant for talking nonsense, raised the issue of nationalising the country’s mines in accordance with the Freedom Charter. Others on the Left soon backed him, justifying it as a means to safeguard miners’ jobs as the sector is under severe pressure in the current global economic situation. The timing, however, should also be read together with pressure on government to bail out BEE companies in the mining sector, 80% of which are in trouble.
Malema posed the question whether the ANC should ask itself if the time has arrived for the government of President Jacob Zuma to make sure that, within the context of the “failure of capitalism” in the current global crisis and the envisaged transfer of wealth to the majority of South Africans, the state owns “the mines and other means of production as called for in the Freedom Charter”.
Left wing labour and political organisations allied to the ANC quickly absorbed the issue into their campaign to assert pressure on the Zuma government to make certain leftward policy shifts in furthering the ANC’s “national democratic revolution” needed for creating the right kind of space for the envisaged subsequent fundamental shift towards socialism.
However, their ideological motives did not factor in that government does not have the money to take over a mining industry worth well over R2-trillion. Nor will government be able to attract or offer the managerial expertise to run such a massive industry.
Ever since playing a key role in bringing Zuma to power, the Left have become much bolder in their attempts to influence a leftward policy shift. This has largely been resisted by the Zuma administration whose focus is far more on the process of consolidating power in a centralised and coordinated system to further developmental aims within which some lesser policy shifts may be incidental, but not paramount.
In this vein then, Malema quickly received backing from the ANC’s ally and South Africa’s largest labour federation, the Congress of South African Trade Unions, which issued a statement saying it supported “the call of the ANC Youth League for the ANC government to start considering nationalisation of mines in line with the Freedom Charter”.
COSATU added that this was “totally in line with the resolution of the COSATU 9th National Congress in 2006 which called for ‘more equitable ownership, especially collective ownership through the state, worker control and co-ops, including through nationalisation of mining and other commanding heights of the economy as provided in the Freedom Charter’.”
This was followed by David Masondo, national chairman of the Young Communists League, also supporting a call for South Africa’s mines and banks to be nationalised as it was necessary, in his view, for the state to own the means of production in order to achieve socialist revolution. Masondo says, however, many in the ANC will resist this as their “class interests” will be negatively affected. Masondo wants mining companies to hand over their assets and business to the government without any compensation, failing which it must be done by force.
Instead of implementing the Freedom Charter, Masondo said, the ANC, in collaborating with white capitalists “has just transferred our wealth to black elite such as Mzi Khumalo, Sakkie Macozoma, Motsepes of this world who have become vultures and bloodsuckers of the working class in the name of the BEE” (sic).
Initially ANC secretary general Gwede Mantashe – himself being a product of the Left – rejected the nationalisation call out of hand, saying the ANC had no such plans and that it could not simply change its conference resolutions at will.
Later however, the ANC softened this response somewhat with an official statement saying it welcomed debate on such issues, but that this had to occur within the context of recognising what the ANC had already done. In this vein it listed the passing of legislation that reverted the ownership of mineral deposits back to the state as well as the Mining Black Economic Empowerment Charter, which is an addendum to that legislation and has legislative effect. It also said it would seek any implementation of further measures through engagement “with all our social partners”, which includes business. Its basic stance remained rejection of the nationalisation option, however.
This had the Young Communists up in arms who responded with a statement saying, inter alia: “As the YCLSA, we welcome the ANC's willingness to engage on the transfer of wealth to the people as a whole in a form of nationalisation and/or socialisation of our mines and banks. However, the ANC cannot lead society from a watered-down interpretation of the Freedom Charter and its own resolutions. We are concerned that the ANC's interpretation of the Freedom Charter is just equated to the Mineral and Petroleum Resources Development Act. Transfer of the minerals in the hands of the state does not necessarily mean actual transference of the wealth to the people.”
If anything, these exchanges through media statements clearly show that the ruling ANC and its leftwing allies do not see eye to eye on these issues.
To make matters worse for the Left, the COSATU-affiliated National Union of Mineworker, through its general secretary Frans Baleni, also rejected the nationalisation calls saying in an interview with the newspaper Business Report that mineral rights had already been nationalised under the ANC government.
"Clearly, if you annex private assets you will have a problem unless there is a willingness to sell," Baleni told the paper. "We are saying: 'Do these things in a dynamic way rather than through imposition.'" He added that an audit of state mining activities, as well as a study of state entities that had mining rights, should be conducted to determine areas where greater state involvement could occur. De Beers had hived off its interests in Namaqualand Diamonds some time ago to the state diamond company, Alexkor, which was "a good model".
Baleni’s take on the issue found support with ANC MP Letsau Diale who called for the nationalisation of disused mines as a solution to illegal mining. Diale made the call after MPs heard from the chief economist of the Chamber of Mines, Roger Baxter, that theft was costing the industry as much as R5-billion a year. Recently a large number of illegal miners also died in an underground accident.
Diale said “the starting point is not to nationalise all the mines, but we must take these (disused) mines and nationalise them”. Others in the ANC have called for the creation of a state-owned mining company to address certain issues and/or to compete in an open market with privately-owned mining companies.
Finally, the Malema/YCL/COSATU call for nationalisation was literally shot out of the water by President Zuma’s Mineral Resources Minister, Susan Shabangu, when she told Reuters in an interview “we are definitely not going to nationalise mines”. And the final word came from President Zuma himself this weekend when he said there were no plans to nationalise mines, that it was “just a debate” and not policy.
She further said: "The ongoing debate will not change the government's policy at all. It must be a concern for investors, but I want to assure them that as government we are not going to go on that route. The South Africa they knew yesterday is the same today and nothing will change. It is a non-issue."
For investors and others with a stake or interest in South Africa’s mining industry, the banks or any other major economic sector, this should be most reassuring. However, while the ANC cannot control its allies, it would be wise to advise its allies to engage in more responsible debate and exercise greater caution with wild statements that cause unnecessary panic, concern and damage. For in the longer term this kind of action will cause another part of the colour-by-numbers perception picture of South Africa to be coloured red even if not justified or deserved.
