Business Day
*ANC study 'advises against' mine grabs* *Sam Mkokeli, Business Day, Johannesburg, 2 February 2012*THE African National Congress (ANC) research team on nationalisation has resubmitted its report to the party, and while it is confidential, it is reliably understood to discourage "asset grabs" and buying stakes in mines.
The report could go some way towards settling the vexed question of nationalisation in the ANC, which has been pushed by its youth league to adopt it as official policy, despite warnings that it would discourage investment in SA's already ailing mining sector.
The nationalisation debate is also being used as a political tool in the party's succession debate.
The report, which is expected to be discussed at the party's national executive committee meeting this weekend, is said to discourage asset grabbing as it is unconstitutional, and the purchase of stakes because the government could not afford it.
However, it apparently recommends an upwards revision of royalties and tax regimes. It is said to recommend more beneficiation of raw materials and the introduction of higher taxes on exporters of unbeneficiated materials.
A separate discussion document on the economy, compiled by the party's economic transformation committee, will also be tabled at the meeting. It is also understood to oppose nationalising mines in favour of greater beneficiation.
Making it compulsory for retirement funds and insurers to buy state-owned companies' bonds is also on the cards.
An export levy has been suggested, as a way to "ensure security of supply" of commodities.
The ANC wanted incentives to encourage local beneficiation, meaning it would have to introduce taxes and penalties. There were, however, no specifics in the report on what incentives and taxes should be introduced, and the government will have to come up with these details.
ANC economic policy chief Enoch Godongwana yesterday said the intention to create a mineral beneficiation industry was the "stated policy of the ANC".
"Where technology allows, we should make sure that we add as much value as possible." Beneficiated minerals would be for domestic consumption and export.
The nationalisation report was compiled by three economists and was intended to guide the party's discussions about how to better distribute the benefits of the country's mineral wealth.
Pundy Pillay, one of the three researchers, said they had given the report to ANC secretary-general Gwede Mantashe early last month. The ANC had sent the report back to the researchers in December, asking them to write it in simple language and provide more details.
Prof Pillay, a lecturer at the University of the Witwatersrand, worked on the research project with independent researcher Paul Jordaan and Margaret Chitiga-Mabugu of the Human Sciences Research Council. They visited a dozen mining countries, including Botswana, Australia and Brazil.
If approved by the party's national executive committee this weekend, their report will be released to the public and the lower ANC structures in preparation for the party's June policy conference. A final policy decision will be taken at the Mangaung elective conference in December.
Sources said influential ANC leaders were opposed to the idea of the state owning mines.
On the ANC's economic policy committee are respected business-friendly leaders such as Cyril Ramaphosa and Trevor Manuel.
However, at least two provinces and the youth league have formal resolutions calling for nationalisation. They have the backing of some of the allied labour unions, but the Congress of South African Trade Unions (Cosatu) and the South African Communist Party do not favour buying mines or confiscating them.
Some Cosatu affiliates argue that the mineral rights are already in the hands of the state.
The ANC will discuss policy proposals from all of its subcommittees, which will feed into the discussions ahead of the policy conference. The policy discussions happen amid serious tension in the party, relating to ANC Youth League president Julius Malema's appeal hearing.
Mr Malema has appealed against a five-year suspension from the party, which came after he was convicted of disrespecting party leaders and sowing division. This will be the first meeting of the national executive committee since Mr Malema's appeal, which was heard by an appeal committee chaired by Mr Ramaphosa last week. It is understood Mr Ramaphosa's committee is yet to discuss and reach a verdict.
ANC leaders from Limpopo could also use the meeting to complain about five departments being taken over by the national government, which said they were badly run. They have complained that the national government took over the departments in order to curtail a group that was hostile to President Jacob Zuma.
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