Mining nationalisation "road to ruin" for S.Africa: Anglo boss

Tue Feb 8, 2011 8:24am GMT
CAPE TOWN (Reuters) - South Africa should not heed "false prophets" calling for mining nationalisation because of the damage such a move would do to its economy, the head of global mining giant Anglo American said on Tuesday.
"Mining companies simply will not invest if they cannot be assured that the assets they create will be secure," chief executive Cynthia Carroll said in a speech at a major African mining conference in Cape Town.
"In ignoring this truth, the false prophets who argue for nationalisation are advocating the road to ruin -- a path we must not follow," she said.
In the last year, radical elements within South Africa's ruling African National Congress (ANC) -- most notably its Youth League -- have been calling for nationalisation of the mining industry, sparking concern among domestic and foreign investors.
Senior ANC figures including President Jacob Zuma and mines minister Susan Shabangu have said nationalisation is "not policy", but have stopped short of quashing the idea, suggesting it may have some traction in the corridors of power.
The notion, which was tabled at a major ANC policy meeting last year, is seen as one of the primary reasons for the decline over the last 10 years in the mining sector in South Africa, the world's biggest platinum and number three gold producer.
The industry has also been plagued by a series of controversies in the administering of mining and prospecting licences, although the government says it is overhauling the system to eliminate the possibility of corruption and blunders.
Mining accounts for 8 percent of GDP in Africa's biggest economy, and directly employs more than 500,000 people.
The government has placed it at the heart of plans to tackle 25 percent unemployment over the next five years, although many anlaysts are sceptical about turning the industry round.