S.Africa's mine nationalisation needs debate: AngloGold

Reuters, Wednesday 13 Jul 2011

Should nationalisation be with or without compensation, both options are bad in the eyes of the head of Africa's top gold miner

Nationalisation of South Africa's mines needs to be debated and not dismissed, the head of Africa's top gold miner said on Wednesday as he warned about the damage such move could have on the country's economy.

In a letter published in Business Day financial daily, Mark Cutifani, the chief executive officer of AngloGold Ashanti, said the push for nationalisation of South Africa's mines, led by the Youth League of the ruling African National Congress, was motivated by "something else" than a call for greater social change.

"Surely nationalisation cannot mean what it might be taken literally to mean: the acquisition by the state, with or without compensation, of all the country's mining assets," he wrote.

"If compensation is paid, it would destroy South Africa's fiscal stability."

If companies were not compensated, it would destroy the finances of many average South Africans who would had invested in companies either directly or via pension funds.

Much of the political impetus behind Youth League leader Julius Malema stems from the failure of post-apartheid affirmative action, or "empowerment", to spread wealth and control of the economy beyond whites and a small black elite.

Malema's rhetoric about nationalisation and seizure of white-owned farms has unsettled domestic and international investors, not least for its parallels to the disastrous policies of President Robert Mugabe in neighbouring Zimbabwe.

Cutifani said that while the industry may have failed to meet some of the transformation targets and more needed to be done, much had been achieved to spread wealth and benefit previously disadvantaged black South Africans.

He said he supported the state-owned mining company created earlier this year, which some said should be the extent of state involvement in the industry.

"The state-owned mining company offers further opportunities. We offer all reasonable support," he said.

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