Johannesburg - The nature of state intervention in South Africa's
mineral assets will be debated at this week's ANC policy conference in
Midrand.
The ANC has released a discussion document -
"Maximising the developmental impact of the people's mineral assets:
state intervention in the minerals sector" - known as Sims.
Sims is based on an extensive study commissioned by the
ANC to discover how best to leverage South Africa's mineral wealth to
grow the economy and create more jobs.
"The Sims study noted that whilst SA was exceptionally
rich in minerals the crucial mineral economic linkages were not being
maximised, and that the state was not receiving an equitable share of
the resource rents," Jeff Radebe, head of the ANC national executive
committee policy subcommittee, said at the launch of the discussion
documents in March.
According to the document, the minerals sector must be
placed at the heart of the national development strategy, as it is South
Africa's only natural resource sector that can be regarded as
exceptional in global terms.
This would require better co-ordination between government departments.
The document suggests merging the departments of
mineral resources, trade and industry, energy, public enterprises,
economic development and science and technology to form a super economic
ministry.
Improving maths and science education was essential, as
no country studied by the research team had successfully developed its
minerals base without significant investment in technical knowledge,
research and development.
The study found that nationalisation of mineral assets
was not affordable as it would cost just over R1 trillion to acquire a
100 percent stake in all listed and non-listed mining companies.
"This exceeds the entire government budget, which is expected to exceed R1 trillion for the first time in 2012/13."
Nationalisation without compensation -- as called for
by the National Union of Metalworkers of SA and the ANC Youth League --
would require a change to the Constitution and would result in a near
collapse of foreign investment and access to finance.
"This route would clearly be an unmitigated economic disaster for our country and our people."
Instead, the study proposes state control through the
introduction of a 50 percent resource rent tax, or a super tax, which
kicks in only when an investor has made a reasonable return, so as not
to deter investors.
Resource rents refer to surplus revenues after the payment of all exploration, development, and extraction costs.
"So they are exceptional profits embodied in the
people's mineral assets and consequently should be shared between the
people and the mining company."
The document proposes that resource rents be ploughed back into social and economic development.
The State Minerals Company, which has already been
decided on, should be tasked with creating better access to strategic
minerals, such as iron ore, coal and copper, to supply to the domestic
market at competitive prices.
At the moment, key minerals are supplied to the local market at exploitative prices, which hinder growth and job creation.
Beneficiation of minerals is vital to ensure jobs are
created in sectors such as manufacturing, energy, infrastructure and
agriculture.
A presidential mineral rights audit commission should
be established to carry out a forensic audit on the granting of all new
order mining rights and, if improperly awarded, these should be
suspended.
The ANC will meet in Midrand for four days, starting on
Tuesday, to discuss 13 policy documents ahead of its national
conference in December.
The policy decisions made at the policy conference will
then be discussed and finalised at the national conference in Mangaung,
Free State, in December.
These policies will form the basis for the ANC government's policies, new laws or amended laws.
