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South Africa Mines Won't Be Nationalized, Minister Says

South Africa Mines

DONNA BRYSON   02/ 7/12 03:56 AM ET  AP

JOHANNESBURG — Nationalization is not an option for South Africa's troubled mining industry, the country's mining minister told an international audience Tuesday.

A nationalization debate within mining minister Susan Shabangu's governing African National Congress is said to have made foreign investors wary, depriving a key industry of capital.

According to the text of her speech opening an international meeting on the mining industry in Cape Town, Shabangu said a report by an ANC task team concluded "that nationalization is not a viable policy for South Africa."

"This is not a surprise," added Shabangu, who has at times appeared frustrated that her repeated pronouncements against nationalization have been drowned out by other ANC figures who have less influence on policy.

Nationalization has been pushed in particular by Julius Malema, the vocal and populist leader of the ANC's youth league. Malema's profile has been diminishing, in part because of accusations linking him to corruption in the awarding of government contracts for building roads and other projects in his native Limpopo, a northern South African province.

And over the weekend, ANC officials affirmed a party disciplinary committee's early finding that Malema is guilty of serious violations, including challenging President Jacob Zuma's leadership. He will get a chance to argue against a five-year suspension.

South African officials have repeatedly expressed concern the country's mining industry is underperforming. Observers blame crumbling infrastructure, mismanagement and the specter of nationalization.

"Certainty over property rights is critical to attract long-term investment," Trevor Manuel, South Africa's respected former finance minister who is now a top aide to the president, said Monday, addressing the same group to which Shabangu spoke on the eve of the official opening of the mining conference.

Manuel said uncertainty over nationalization along with other questions about how mining rights are determined need to be resolved "speedily because if we fail to do so, we will continue to lose out from higher global demand."

In a report released Monday, the country's Industrial Development Corporation said South Africa was lagging behind other countries in getting key minerals out of the ground. Jorge Maia, head of research for the corporation, called for "significantly higher levels of investment, supported by major improvements in the energy and transportation infrastructure."

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Filed by Eline Gordts  |