S.African Gold Mining Battles Nationalization, Falling Output

NATIONALIZATION of South Africa's Gold Mining and other mineral industries is becoming a hot issue for the ruling ANC Party, even as the country's gold output continues to fall.

"Leaders of the ANC have been saying nationalization is not the policy of the ANC. [But] it is the policy of the ANC, and we want to reactivate it so it becomes policy of the government," said ANC Youth League president Julius Malema on Tuesday at the Mining for Change summit in the Sandton suburb of Johannesburg.

"We want to nationalize because we want to make profit...to increase the budget of the state," Malema said. "If you say it is not the policy of the ANC...you are denouncing the Freedom Charter" – the statement of core principles first established by the African National Congress in 1955.

Hinting at Gold Mining and other controversial mineral deals struck with relatives of the ANC's senior executive in recent years, "[Nationalization] is what our leaders have fought for," said Malema.

South Africa's Chamber of Mines said last week that second-quarter Gold Mining production fell 2% from the same period in 2009.

Formerly the world's largest producer throughout the 20th century, Gold Mining in South Africa has now fallen behind China, Australia and the United States, with annual output halving from a decade ago.

South Africa's Gold Mining costs are amongst the highest in the world, says data from the GFMS consultancy, and it is home to the world's deepest Gold Mining projects, running up to 4.2km below ground. The average age of a South African gold mine is now almost 50 years, according to BusinessDay, and "In the next 10 years, if nothing changes...there will be three gold mines left; three real, major producers," the paper today quotes AngloGold vice-president Robbie Lazare.

"We want to break out of the mould of applying old Gold Mining technologies and enhancing them," Lazare says, announcing new and as-yet untested methods. "We need something completely different."

Also speaking at the Mining for Change summit this week, "To pose [nationalization] now I think is to miss the point," said Joel Netshitenzhe of the Mapungubwe Institute of Strategic Reflection.

"The level of state participation...will be informed by the effectiveness of the mining sector strategy arising out of a compact among all players."

Physical Gold Investing – now simple, secure and cost-effective like nowhere else at world No.1 BullionVault...