ANC wants to force banks to invest in new coal mines
Refusal by institutions paves way for prescribed assets, Enoch Godongwana says referring to party’s probe into forcing pension funds to invest in developmental projects
South Africa’s banks should be forced to invest in new coal mines, Enoch Godongwana, ANC head of economic transformation, said.
Nedbank and Standard Bank have said “they are not going to put money in coal any more”, Godongwana said in an interview on Carte Blanche. “To me, that’s an invitation for prescribed assets,” he said in a reference to the party’s investigation of whether to force pension funds to invest in developmental projects.
While Standard Bank and Nedbank, two of the country’s biggest lenders, have said they will not invest in coal for environmental reasons, SA relies heavily on the fuel for power generation. The country has 66-billion metric tons of coal reserves, Godongwana said. Eskom Holdings, the state power utility, has said new mines are not being opened quickly enough to ensure supply for its power plants.
“Who determines policy? A government of the day determines policy,” Godongwana said. “You can’t therefore have individuals determine what is the policy of the country.”
A move toward prescribed assets, while mentioned in the ANC’s election manifesto, would concern international investors and could destabilise South Africa’s R4-trillion pension industry.
“Most investors and local business leaders appear to think that prescribed assets will never end up happening,” said Peter Attard Montalto, head of capital markets research at Intellidex. “This interview seems to suggest otherwise and in a surprisingly specific way on coal.”