Union calls for state to speedily form mine company

The National Union of Mineworkers (NUM) has urged the speedy establishment of a state-owned mining company by June next year as part of a larger drive to nationalise the industry as a whole.

The call adds to the momentum building up for establishing such a company, with the government having already completed an audit of all state interests in mining which would be consolidated into it.

The mineworkers union believed the state mining company would be the vehicle for nationalisation, union officials told MPs during public hearings on the project organised by Parliament’s mining portfolio committee on Friday.


The NUM’s parliamentary officer, Madoda Sambatha, called for a restructuring of the process of issuing mining licences from 2014 so that all new mining licences would be issued only if 49% of the applicant company was held by a private investor, 31% by the state mining company, 10% by employee share ownership schemes and 10% by the community. Mining rights already approved would be subjected to this regime by 2019.

The state mining company, which Sambatha said should be called JB Marks SA Consolidated — after the former leader of the South African Communist Party and trade unionist — should be given responsibility for a mineral beneficiation strategy.

Such a strategy should prescribe that 10% of all raw materials extracted by any company would be “handed over” to the state company for beneficiation , he said.

The profit earned by the company would be used to fund health, education and rural development, and a portion would be reinvested.

The NUM did not support the suggestion by African National Congress Youth League president Julius Malema in an earlier submission for all mineral rights — currently vested in the state under the Mineral and Petroleum Resources Act — to vest in the proposed state mining company. Sambatha stressed the need for the proposed company to operate on a level playing field with private sector companies.

He also did not agree with Malema’s call for a moratorium to be placed on the issuing of new mining and prospecting licences, saying this would affect job security.

In the NUM’s view, the state mining company should fall under the Department of Mineral Resources rather than the Department of Public Enterprises, and the licensing function currently exercised by the former should be taken over by the Department of Trade and Industry.

The NUM also proposed that consideration be given to establishing a mining investment and development bank, similar to the Development Bank of Southern Africa and the Land Bank but under the auspices of the mineral resources department.

“Whether Parliament takes a decision on nationalisation or not, the reality is that any decision will ultimately need an implementation arm or vehicle. Our view as the union is that the current debate on nationalisation and this public hearing (on a state-owned mining company) should be seen as integral and reinforcing each other,” Sambatha told the committee.

Source: Business Day