Trade minister rejects plan to nationalise SA mining sector

Compensation will be paid if ANC Youth League plan is ever adopted, says Davies
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The Independent Online

Nationalising South Africa's mining assets is not the policy of the ruling African National Congress (ANC), the country's Trade minister insisted yesterday, despite a simmering row between the party and its influential youth league.

Speaking ahead of President Jacob Zuma's state visit to Britain, which starts today, the country's Trade and Industry minister, Rob Davies, told The Independent he wanted to sooth fears that the state might take control of the lucrative mining sector. However, he refused to rule out nationalisation in future, saying there was "a debate" to be had about the issue.

"It is a debate that the ANC Youth League is pushing, which is its right, but it is not remotely close to becoming ANC or government policy," Dr Davies said. "There is no support in government, and support in the broader ANC remains to be tested." Several British mining companies, including Anglo American, Xstrata and BHP Billiton have significant operations in South Africa.

Asked if the policy would still be the same in 10 years' time, the minister responded by saying nationalisation was not the policy "at this moment".

"If it were to happen there would be compensation for the companies affected," he said. "As part of our constitution there are all kinds of investment protection agreements we have with all kinds of people. Even if it were to become policy, there would be some way in which we'd award licences to companies that came in. It is very far from reaching any kind of conclusion."

The comments come just a month after the Mining minister, Susan Shabangu said a takeover of South Africa's mines would not take place "in my lifetime". Ms Shabangu followed up her comments at a meeting in London on Monday, when she played down the row with the Youth League and said nationalisation was at odds with the policy of promoting growth and employment in the sector.

The debate on mine nationalisation has intensified in recent weeks after the Youth League, which is led by Julius Malema, adopted a framework which would eventually lead to the state taking over the industry. Mr Malema has attacked Ms Shabangu for making "false assurances" on the issue.

Mr Malema is a strong supporter of Mr Zuma, although the President has reiterated in recent weeks that there is no government agenda to nationalise the industry. Nevertheless, mining companies remain nervous about the issue. A spokesman for Anglo American, which is listed on the London and Johannesburg stock exchanges, said yesterday: "We are encouraged by what the Mining minister said earlier this month about South Africa having no plans to nationalise the mining industry – we are comfortable with the current situation." However, Xstrata, BHP Billiton, Lonmin and Rio Tinto all refused to comment.

Dr Davies is in London as part of a 200-strong delegation to promote investment in South Africa. "We have a strong relationship with Britain, even if two-way trade has taken a big knock during the recession," he said.

"No one really knows what will happen in terms of economic growth, but after China and India, the International Monetary Fund forecasts that Africa is the next big story. Obviously, we're a big part of that."

South Africa is keen to develop a reputation as a leader in a range of industries, including renewable energy and auto manufacturing. Dr Davies is scheduled to meet more than 200 business leaders during his week-long stay in London.