Gold News

Gold Mining Nationalisation Threat In South Africa

We're One Step Closer To The Nationalisation of South Africa's Mines...

NATIONALISATION OF THE mining industry is now to be part of South Africa's ruling ANC party's conference agenda in September.

President of the African National Congress Youth League (ANCYL) Julius Malema has succeeded in making mine nationalisation a part of the agenda, bringing nationalisation of mines closer to reality.

If he manages to convince the mid-term reviewing conference, this could potentially mean a state presence in an industry that produces over 10% of the world's Gold Mining output and is worth 5.8% of South Africa's total GDP.

"There will be serious roundtable documents that will look at our approach to the economy, including the nationalisation of mines," said ANC spokesperson Jackson Mthembu.

In its discussion document on mining nationalisation, the ANCYL is calling for the establishment of a state-owned mining company. It wants South African mining legislation – the Mineral and Petroleum Resources Development Act – amended to allow the state-owned mining company to take 60% in new projects.

"It will not be fair on private investors to spend $26m on exploration, only for the state to come in to take 51% in the project," says Nchaka Moloi, chair of the South African Mining Development Association

"If the state wants a bigger share in mining projects, it must be prepared to invest in exploration."

This news comes only weeks after an Australian "super-tax" of 40% was defeated by stiff resistance from mining companies, a tax proposal that one mining CEO called "a 40% nationalisation".

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Christopher Whitehouse is working as a research assistant at BullionVault, the No.1 gold and silver ownership service for private investors.

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