ANC's Gwede Mantashe Downplays South African Mine Nationalization Call

The leadership of South Africa’s ruling party downplayed calls by its youth wing to nationalize new mines in the country, saying “concrete proposals” are needed before the idea can be considered.

The African National Congress’s Youth League argues that nationalization became party policy when it adopted a document known as the Freedom Charter in 1955. While the ANC has never officially distanced itself from the charter, some of its resolutions have not been implemented.

“Given that the ownership of all mineral deposits have reverted back to the state, that private operators pay royalties to the state and a state-owned mining company has been reactivated, we need to offer concrete proposals as to what more can be done,” Mantashe said.

South Africa has the world’s largest reserves of platinum, chrome ore and manganese, and companies including Melbourne- based BHP Billiton Ltd. and London-based Rio Tinto Group and Anglo American Plc have mines in the country. Citigroup Inc. has valued the country’s total mineral resources at $2.5 trillion.

Laws passed in 2004 that compel mining companies to sell 26 percent of their local assets to black South Africans by 2014 have done too little to transform the industry in the 16 years since the end of apartheid, the league argues.

The debate on nationalization “has to be expanded to give meaning to the clause in the Freedom Charter,” ANC Secretary- General Gwede Mantashe said in a written report distributed in the southeastern port city of Durban today.

Case to Argue

The text of the Freedom Charter states: “The mineral wealth beneath the soil, the banks and monopoly industries shall be transferred to the ownership of the people as a whole. All other industry and trade shall be controlled to assist the wellbeing of the people.”

The Youth League intends pushing the ANC to adopt nationalization as official policy at the party’s five-day national general council that began in Durban today. The gathering is the ANC’s second most important policy formulation forum after its national congress, which is next due to take place in 2012.

ANC Youth League leader Julius Malema has warned that party leaders who fail to back the nationalization call may be voted out of office.

“The ANC Youth League must be more open and tolerant of different views when issues are open for public debate,” Mantashe said. “To antagonize and alienate those who wish to contribute to the debate makes the engagement poorer.”

‘Remain Divided’

Zuma made no reference to nationalization in his opening address to the ANC meeting saying only that the party will review progress in implementing policies agreed upon at the ANC’s last national conference in 2007 and won’t deal with “new policies.”

Nationalization “is not government policy,” Finance Minister Pravin Gordhan said in an interview today. “These forums that we create are for the purpose of debate. If anybody wants to argue their case, they can argue their case.”

The ANC differs from its labor union allies over economic policy, Mantashe said.

“We remain divided over monetary policy,” he said. That includes “exchange rate policy. Inflation targeting, exchange controls and the most appropriate framework to effectively deal with the challenge of high unemployment.”

To contact the reporters on this story: Mike Cohen in Durban via Johannesburg at mcohen21@bloomberg.net; Franz Wild in Durban via Johannesburg at fwild@bloomberg.net

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