Mine nationalisation ruinous for S.Africa: Anglo chief

8th February 2011, Comments 0 comments

Nationalising South Africa's mines would be the country's path to ruin, driving drive away billions of dollars in investment, mining giant Anglo American's chief executive warned on Tuesday.

"Mining companies simply will not invest if they cannot be assured that the assets they create will be secure," Cynthia Carroll told an African mining conference in Cape Town.

"In ignoring this truth the false prophets who argue for nationalisation are advocating the road to ruin, a path we must not follow."

The firebrand leader of South Africa's ruling party youth league, Julius Malema, is pushing to nationalise mines in South Africa, which has 88 percent of the world's platinum group metals and 30 percent of its gold reserves.

The government has repeatedly said nationalisation is not its policy but the ruling African National Congress (ANC) last year agreed to research the issue amid insistent calls from the outspoken Malema.

ANC Secretary General Gwede Mantashe repeated that stance Tuesday, saying the party was looking into the viability of nationalisation.

He said the ANC would examine case studies in 13 different countries in Latin America, Africa and Europe.

"We are not going blindly on this one," Mantashe told reporters in Johannesburg.

He said the research findings would be taken to the party's 2012 policy conference and that a decision on the matter would likely be taken at its national conference thereafter.

The mining industry has called on the government to put an end to uncertainty about nationalisation.

"Mining lead times are long and companies need to be able to plan with confidence 20, 30, 50 years ahead, and the amounts involved are significant with the investments requiring billions of dollars," Carroll said.

London-based Anglo American, which was founded in South Africa, is the country's largest private sector employer and generates between 2.0 percent and 2.5 percent of South Africa's GDP, she said.

© 2011 AFP

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