JOHANNESBURG (miningweekly.com) – President Jacob Zuma called for the 3 500 African National Congress delegates currently engaged in a policy conference to “go deeper” than the current debate over whether or not to pursue nationalisation in South Africa’s mining sector.
Speaking on the opening day of the conference taking place in Midrand, Gauteng, Zuma also welcomed the ‘State Intervention in the Minerals Sector’ report, which eschews ‘blanket nationalisation’ in favour of policies that would enable government to capture a larger share of the so-called ‘rents’ associated with the industry.
The 400-page report argues that these rents should be captured through a 50% resource rents tax, or RRT, which would be levied on earnings that were achieved over-and-above ‘normal’ profits that flow from the application of capital, labour and innovation. The report proposes a calculation based on a return on investment above the long-bond, plus seven per cent.
It also proposes that forward and backward linkages be developed within the mining sector to stimulate reindustrialisation, as well as the beneficiation of ‘strategic’ minerals.
This would necessitate changes to the existing Mineral and Petroleum Resources Development Act (MPRDA), which had already overhauled private ownership of mineral rights and enabled the State to stipulate economic, environmental and social conditions before awarding a licence.
Zuma emphasised that, through the MPRDA, the country’s mineral resources were already a national asset and a “common heritage that belonged to all”, with the State as custodian.
“That is what the situation is,” Zuma stressed, adding that the South African government already exercised sovereignty over all of its mineral and petroleum resources.
Zuma's input on mining was made within a bigger discussion on economic transformation, which, itself, was framed by the so-called 'second transition' ANC policy discussion paper.
"The time has come to do something more drastic to accelerate change towards economic transformation and freedom," Zuma outlined, while calling for a 'radical shift'.
Such transformation should be premised on a "mixed economy", where the State and private capital complemented each other to deal with the "triple challenge" of poverty, unemployment and income inequality.
The State, Zuma argued, needed to play an active role in helping to "democratise and deracialise" the ownership and control of an economy whose structure still reflected many of the aspects of the apartheid economy.
Also required was a move from a process of black economic-empowerment based on the distribution of shares in existing businesses to one that facilitated the creation of new enterprises, especially in the productive sectors of mining, manufacturing and agriculture.
Besides the proposed intervention in the mining sphere, the policy documents under discussion also proposed a review of the 'willing buyer, willing seller' policy for land redistribution.
Zuma said the current policy was inflating prices, delaying sales and frustrating restitution and redistribution efforts.
"People are getting angry," he said, while stressing that any change in policy would remain within the confines of what was Constitutionally legal.