Feb. 7 (Bloomberg) -- A study commissioned by South Africa’s ruling African National Congress on state intervention in the mining industry proposes that government and labor unions pool stakes in mining companies held by their pension funds, Business Day said, citing the report.
It also proposes the creation of a sovereign wealth fund financed by a 50 percent tax on “super profits” earned by mines, the Johannesburg-based newspaper said. The report, which dismisses calls for the nationalization of mines, recommends the merger of six existing government departments, it said.
Trevor Manuel, the head of South Africa’s National Planning Commission, yesterday said nationalizing mines would not be a “smart strategy” for South Africa and changes to taxes or ownership will only be made after extensive consultation with the industry.
The ANC first commissioned the mining study after calls by it youth wing, led by Julius Malema, for nationalization. The youth league said the country’s black majority isn’t benefiting enough from the industry that is the world’s biggest producer of platinum, chrome and manganese. Anglo American Plc, Xstrata Plc, BHP Billiton Ltd. and Rio Tinto Plc own assets in the country.
A Ministry of the Economy should be created to oversee the pooled mining stakes and should encompass departments of trade and industry, mineral resources, energy, public enterprises, economic development and science and technology, Business Day said, citing the report. The report also seeks changes to the Mining Charter to increase black ownership in mining companies to 30 percent from 25 percent, according to the newspaper.
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