[miningmx.com] — LESS than year ago – just before the ANC’s National General Council meeting in September last year, it was practically ridiculous to think that nationalisation of the mining industry could be considered.
Against all expectations, at this meeting the ANC decided to research the possibility of nationalisation of the mining industry. A three-man commission has since been appointed which has to report to the ANC’s policy congress by the middle of next year.
A formal proposal will then be prepared for the party’s national congress in Mangaung in Bloemfontein, where the ANC was founded 100 years ago.
But it was only after the ANC Youth League Congress three weeks ago that the realisation dawned: something was happening that was building momentum and could easily go awry.
Last week one of the country’s top mineral rights attorneys, Hulme Scholes, urged the mining industry to participate in the debate much more earnestly.
Communication between the mining industry and government, he said, is being browbeaten by legal arguments.
A week earlier Bobby Godsell, who chairs Business Unity South Africa, had also expressed himself in favour of better liaison between the business sector and government, but he pointed out that the business sector was responsible for the economic-political debate going in this direction and being dominated by the types of argument that had emerged at the Youth League Congress.
The realisation is starting to dawn that some or other form of government intervention in the mining industry is inevitable.
For that reason it absolutely essential for the broad business sector, but the mining industry in particular, to get involved in the debate.
First, the view that it will result in some form of mining assets being blindly seized by the state or plundered by thugs needs to be quashed - a sort of mining version of what happened to agriculture in Zimbabwe.
The mere fact that the ANC initiated a formal decision-making process on the subject – which extends over more than two years and includes an international study group – makes it clear that something entirely different is happening here.
Second, participation by the private sector must be aimed at ensuring that state intervention in the mining industry is as effective as possible, no matter what form it takes.
Of course, there are many who firmly believe government simply lacks the capacity to interfere in any way effectively in the mining industry, or any other industry.
Yes, there are many examples of attempts by our government and other governments throughout the world that have failed dismally, often with tragic results.
But there have also been examples of successes, especially in the mining industry. Kumba’s Sishen Mine is one of the most profitable mines in the country, but Sishen would not have existed had it not been for state involvement in the mining industry.
The same goes for other enterprises: Sasol, ArcelorMittal and Foskor. Foskor is still owned by the state, but it’s highly profitable and was on the point of listing on the JSE when the 2008 worldwide economic downturn prevented it from doing so.
Scholes reckoned the Chamber of Mines is probably not the appropriate channel to communicate with government. As far as abilities and skills are concerned there is probably no institution in the organised business sector that can match the Chamber of Mines, but the Chamber consists of paid officials who work for the industry. They have no mandate to act on behalf of the industry. They represent vested interests that they have to protect.
A little more than a year ago Citigroup did a valuation of mineral rights in the world’s major mining countries and on the basis of that calculated that South Africa still owned the world’s most valuable mineral resources, despite our depleted gold reserves.
Craig Sainsbury, a Citigroup researcher, put this value at $2,500bn. Of this, $2,300bn consists of platinum group metals (PGMs).
PGMs are used mainly to reduce motor vehicles’ exhaust gases, for jewellery and to manufacture certain special computer parts, especially for hard drives. By far the most important future use of platinum, which makes these platinum reserves so valuable, is their use in fuel cells.
In its latest annual report Anglo American Platinum says that the use of platinum in fuel cells doubled last year, although still coming off a low base. In Japan and Korea governments are now paying subsidies to consumers who purchase this expensive technology to use as a power source.
Military use of platinum is also quickly increasing, because fuel cells deliver considerably more electricity than ordinary batteries that weigh the same. The water by-product is regarded as a big asset in remote areas.
Many scientists and analysts believe platinum to be the key to a sustainable solution of the world’s energy and pollution problems.
No-one should underestimate the abilities of companies like Anglo American and BHP Billiton, but are they the right players to get technology like this off the ground?
For decades Anglo has been researching how to develop this type of technology so the platinum market can reach its full potential. But it’s a murky world of industrial secrets worth billions where strict secrecy prevails.
One could probably be accused of believing in Father Christmas when looking at our public service today and thinking it has the capacity to exploit and develop this type of pioneering technology into a viable energy industry.
Someone will do it sometime – with platinum that our miners have blasted and extracted from our mines in the Rustenburg and Steelpoort areas.
Why can’t we do it ourselves? Is it because government and the private sector do not trust each other enough?
– Sake24
