(Updates with comment from Manuel from third paragraph.)
Feb. 6 (Bloomberg) -- A policy of nationalizing mines would not be a “smart strategy” for South Africa and changes to taxes or ownership will only be made after extensive consultation with the industry, Trevor Manuel, the country’s planning minister, said.
While a study into nationalization of mines commissioned by the country’s ruling African National Congress has recommended against the policy, it has proposed increased taxes, a party official who has read the document said last week, declining to be identified because it hasn’t been publicly released. Manuel is a member of the ANC’s Economic Policy Committee, which has discussed the study.
“It doesn’t call for nationalization, it calls for new partnerships,” Manuel told the Mining Indaba conference in Cape Town today. “Given the long lead time the industry deserves policy certainty.”
The ANC commissioned the study after calls by it youth wing for nationalization because it said the country’s black majority isn’t benefiting enough from the industry that is the world’s biggest producer of platinum, chrome and manganese. Anglo American Plc, Xstrata Plc, BHP Billiton Ltd. and Rio Tinto Group own assets in the country
“If you want then to take away those property rights you’re going to have to pay for it and if you pay for that you’re not going to be able to pay for health, education or anything else,” Manuel said, adding that the constitution protects property rights. “The country does not have the resources. It clearly is not a smart strategy.”
While elements of the study could concern the mining industry, the proposals will undergo extensive debate before they stand a chance of becoming policy, he said.
“There are proposals in there that would worry many people,” he said. “It’s important not ever to confuse proposals with adopted policy.”
The ANC study will be discussed and may influence policy arguments at party conferences in June and December.
--Editors: Antony Sguazzin, Alastair Reed
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