MINERAL RESOURCES
Time for government to reconsider public ownership of mining industry
In 2012, ANC said nationalising the mines would be too expensive, but a factual review indicates it is feasible, writes Duma Gqubule
Five years ago, the ANC responded to pressure from its youth league to nationalise the mines by releasing a report that concluded nationalisation was unaffordable. The report put up a straw man argument that aligned perfectly with a "Project Fear" campaign that had been led by the private sector. It would cost R1-trillion to nationalise the industry and R500bn to buy 51% of the mines, the report said. "Consequently, either complete nationalisation, or 51% at market value, would be totally unaffordable and could put our country in a situation where it could lose fiscal sovereignty." In 2012, SA had net loan debt of almost R1-trillion. This was equivalent to 31.9% of GDP. Another R500bn would have pushed the ratio to 48.1%, which would have been quite low by international standards. However, since nobody had suggested that the mines should be nationalised in one day, it is not clear why the report did not consider the affordability of buying them over a 10-year period. With the benefi...
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