Youth League says all mining rights should go to state
owned company
ANC Youth League submission to Parliamentary
Portofolio Committee on Mining's Hearings on the establishment of the
State Owned Mining Company:
26 May 2010
1. South Africa is the richest country
in the World, because of its mineral deposits and reserves. There is no
credible research report in the entire world that disputes the fact
that South Africa is rich with strategic, precious and industrial
metals.
2. South Africa is known throughout
the world as a treasure trove, boasts an abundance of mineral resources,
producing and owning a significant proportion of the world's minerals.
3. South Africa's wealth has been
built on the country's vast resources - nearly 90% of the platinum
metals on Earth, 80% of the manganese, 73% of the chrome, 45% of the
vanadium and 41% of the gold. Only crude oil and bauxite are not found
in South Africa. The recent report outcome by Citigroup confirms that
South Africa is the richest country in the world with mineral deposits
worth more than 2.5 thousand billion US Dollars.
4. The richness of South African
happens alongside high levels of poverty, unemployment and massive
inequalities.
5. The single most important issue
facing South Africa 16 years after the transition to democracy is
breaking the grip of poverty on a substantial portion of its citizens.
6. There is a consensus amongst most
economic and political analysts that approximately 40% of South Africans
are living in poverty. with the poorest 15% in a desperate struggle to
survive.
7. This means that approximately 18
million out of 48 million people have not experienced the benefits of
our newly found freedom.
8. Young people are the most affected
by the massive poverty and, unemployment and inequality challenges.
9. A substantial number of South
Africans are poor and dependent on government funded social grants.
10. There are historical and real
economic reasons why majority of our people continue to live in abject
poverty in the sea of richness.
11. Joblessness is one of the major
contributors to poverty, starvation and many other social ills.
12. The South African economy
continues to exclude a substantial number of our people, while
benefitting few previously advantaged individuals.
13. It is now common knowledge that
the ANC Youth League has called for the country's Mines to be
nationalised, as part of our political programme for total economic
emancipation in our lifetime.
14. We said Nationalisation should be
considered because it is the most practical way to open up opportunities
for all South Africans, create more jobs and develop the South African
economy through beneficiation and industrialisation of minerals.
15. Our document for nationalisation
of Mines includes a concrete proposal that the State should establish a
State Owned Mining Company.
16. We are aware that there is a
difference between Nationalisation and establishment of the State Owned
Mining Company. Parliament and the Department of Mineral Resources
should correctly go ahead with efforts to establish a State Owned Mining
Company, and Nationalisation of Mines will be resolved on a different
platform.
17. The State currently owns PetroSA,
but it does not mean that the whole of the petroleum, gas and fuel
industry is nationalised and the same applies to SAA, SABC, and other
State Owned enterprises.
18. That is the reason why we are here
to input substantively on the establishment of the State Owned Mining
Company, and nationalisation we will discuss and resolve in the ANC
because it is on the agenda of the ANC.
19. The ANC Youth League is of the
view that a State Owned Mining Company should be established and the
State lays a far much greater role in the extraction, beneficiation,
production, industrialisation and Trade of Mineral resources.
20. But we also believe that the State
Owned Mining Company can do the following.
a. Increase the budget of the State for social development
purposes, e.g. Health, Education, Rural development, fight against crime
and job creation.
b. Lay a very firm basis for the country's minerals to be
locally beneficiated and industrialised.
c. Change the South African economy from over-dependence and
reliance of exporting of natural resources and importing of finished
goods and services.
d. Create new economic centres of development outside of
Johannesburg, Durban and Cape Town.
e. Could improve the working conditions and salaries of Mine
workers.
21. The government revenue that is
generated from taxes will not be able to build better lives for all
South Africans. Government cannot solely rely on taxes to deliver better
services to majority of our people. South African will not be able to
deal with the housing backlog, free education access, better healthcare,
safety and security, employment of particularly youth if we are not in
control of the key and strategic sectors of the South African economy.
The wealth of South Africa should benefit all who live in it.
22. It is an open secret that ordinary
workers in Mines are the least beneficiaries of mining in South Africa
either as recipients of salaries and stakeholders in mining. Mineworkers
in South Africa are underpaid and work under difficult conditions and
unsafe Mines. Their workplaces and socio-economic existence expose these
workers to fatal diseases and accidents. Nationalised Mines should be
beacons of safer working environments and better working conditions, as
they will not be in narrow pursuit of profits at the expense of
community and human development.
23. With State ownership and control
of Mineral Resources, South Africa will be able to attract industrial
investors, who will contribute to the growth of the economy, transfer
skills, education and expertise to locals and give them sustainable
jobs. It can never be correct that an absolute majority of the Minerals
we produce is exported to other countries, with very little efforts to
build internal capacity to beneficiate these minerals.
24. Nationalisation of Mines will lead
to greater local beneficiation, industrialisation, growth of the
economy and jobs for majority of our people. The industrial strategy
adopted by government will never succeed unless we have State control
and ownership of the natural resources.
25. We need metals, iron ore, gold,
platinum, COAL, chrome, manganese and many other minerals to
industrialise. South Africa's skills development efforts should be
dynamically (not exclusively) linked to the industrialisation of
minerals wealth.
26. Although related to the above
component, it is important to highlight the fact that the South African
economy as it currently stands bears strong features of all colonial
economies. Primarily, all colonial economies were positioned as sources
and reserves of primary goods and services for the colonisers'
economies.
27. Post political independence, many
if not all post colonial economies continued to function and operate in
the same manner colonisers designed them-exporters of primary
commodities and importers of finished goods and services. This pattern
has a direct impact on the sustainability of post colonial economies as
they are heavily reliant on the demand of their goods and services by
former colonisers and bigger market economies.
28. Nationalised Mines ought to lead
to a Spatial Development Framework that should necessarily decentralise
development.
29. Areas such as Sekhukhune,
Rustenburg, Burgersfort, Emalahleni have far greater economic potential
because of the mineral resources underneath the soil. These should be
deliberately developed, beneficiated and industrialised to enhance and
harness economic and human development in these territories.
30. What is to be done?
31. All Mineral rights should be
transferred to the State Owned Mining Company, which will from time to
time make partnerships with private corporations, where the State will
hold a minimum of 60% shares, and for the remainder of the 40%, the
private corporations should pay royalties and tax.
32. The State should impose a
moratorium on the provision of Mineral rights, and a new mechanism
developed on how new licences should be issued to the State Owned Mining
Company.
33. The State Owned Mining Company
should be established and be under the direct supervision of the
Department of Mineral Resources (not Public Enterprises) and
fundamentally responsible for the following tasks:
a. Own and control South Africa's mineral resources;
b. Maximise the nation's economic gain from the mineral
resources;
c. Contribute to South Africa's social and economic development;
d. Develop and maintain strong environmental and safety
standards; and
e. Develop the mineral resources in a careful and deliberate
manner.
f. Develop strategies for Skills development in the
Mining sector, including through establishment of Mining colleges for
low, intermediary and high intensive skills development of all people.
34. The State Owned Mining Company
should be established through an ACT of Parliament, which should clearly
define its tasks, responsibilities, accountability mechanisms.
35. The SOMCO should necessarily
gather all the State's interests in Mining including those in Allexkor,
African Exploration Mining & Finance Corporation (AEMFC) and various
other Stakes which government holds through Provincial parastatals and
shares in bigger mining corporation.
36. A Minimum of 60% of the Mineral
resources extracted by the State Owned Mining Company should be locally
beneficiated and industrialized, and 50% of such beneficiation and
industrialization of minerals should happen in the Mining Communities.
37. Strong accountability
mechanisms should be instituted to guide how those who work for SOMCO do
not redirect its resources into their individuals benefit and progress.
a. Strong Community involvement and National Accountability
Forum on the management of the Mining resources. There should be an
annual Stakeholders' Mining Conference to discuss the direction and
content of the SOMCO activities, including its finances, community
development programmes.
b. Those involved in the running of the State Owned Mining
Company should be closely monitored and processed for honesty purposes.
Assessment of SOMCO should include all employees of the Company.
38. The State Owned Mining Company
will within a broader Minerals Strategy ensure that all the
beneficiation and industrialisation of minerals benefits all people.
39. Importantly, the State Owned
Mining Company should attract the best of skills, expertise and
knowledge on how best minerals are extracted, produced, beneficiated and
traded for the mineral resources in South Africa.
40. The State Owned Mining Company
should necessarily operate differently to how most State Owned
Enterprises, such as ESKOM, TRANSNET, SAA, etc., operate. The
fundamental difference will be that it will not be run like a private
business corporation whose extent of progress is solely measured through
the amount of profit generated.
41. The State Owned Mining Company's
progress should be measured as per its ability, capacity and coherent
determination to create jobs, maximization of the country's gain from
mineral resources, contribution to socio-economic development and
assistance of communities where mining happens.
42. The Department of Mineral
Resources' Annual South African Minerals Industry (SAMI) says: "As a
major mining country, South Africa's strengths include a high level of
technical and production expertise as well as comprehensive research and
development skills.
43. South African Universities
continue to produce Mining Engineers and skilled strategic leaders of
both the private and public sector.
44. The question will have to be how
the State channels this expertise into the State Owned Mining Company.
45. Developing countries, e.g.
Venezuela looking up to South Africa for the expertise and skill to
mine.
46. The State should channel these
capabilities and expertise to useful outcomes in the State Owned Mining
Company.
47. State Owned PetroSA is a good
lesson and comparison to the State owned Mining Company, because it is
State Owned and does business in a highly competitive environment of
oil. PetroSA is currently building a 400 000 barrel per day oil refinery
and Coega and it is State Owned.
48. For sustainable socio-economic
development and historical justice, this Parliament should responsibly
use the political power it holds on behalf of the people to exert
progressive change. The 16 years of South Africa's democratic
dispensation has come with lots of challenges, but also lots of lessons
on how better the State can change people's lives for the better.
49. South Africa remains one of the
most unequal societies in the world with massive unemployment and
poverty challenges and the key towards unlocking such lies with the will
of the people, which has been temporarily given to this Parliament. We
therefore have a responsibility to change society for the better and
ensure that all South Africans share in the country's wealth.
50. Minerals resources are
non-renewable resources and the further we extract these resources, the
further we deplete South Africa's potential wealth and strategic
economic importance and significance in the world economy.
51. It is therefore the responsibility
of this Parliament to ensure that minerals wealth is utilised in an
environmentally friendly fashion and economically durable manner for the
benefit of all people. All the big Mining corporations that currently
benefit from South Africa's wealth were built on the foundation of poor
people's sweat and blood as cheap labourers, slaves and underpaid
workers in the Mines.
52. LIKE PARLIAMENT DID WHEN ADOPTING
THE MINERALS AND PETROLEUM RESOURCES DEVELOPMENT ACT IN 2002, we believe
that this Parliament will be decisive and pass the ACT of Parliament
establishing the State Owned Mining Company.
53. The people of South Africa should
share in the country's wealth. The mineral wealth beneath the soil,
monopoly industries and banks should be transferred to the ownership of
the people as a whole.
Issued by the ANC Youth
League, May 26 2010
L.G Mkhwanazi
Tel: (012) 751 1227
Cell: 072 987 9798
Fax: 086 665 4388
"Destiny is not a matter of chance; but a matter of choice. It is not a thing
to be waited for, It is a thing to be acheived"
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