Sweating the big stuff

At a recent South Africa-Argentina bi-national commission seminar organised by ambassador Tony Leon, an Anglo-Gold Ashanti representative made some interesting observations about the rise of what she called resource nationalism.

The term is generally used by industry players to describe the tendency of governments to demand a bigger share of the profits made from their countries' natural resources.

Yedwa Zandile Simelane, senior vice president: corporate affairs at the global mining giant, observed that - with the world economy struggling - more governments are becoming attracted to resource nationalism.

If they are not demanding a bigger stake in the ownership of mining companies that operate in their countries, they are becoming more protectionist.

As a result, said Simelane, the regulatory environment has become uncertain for many miners, with licence conditions being changed and more taxes and royalties being demanded.

In Chile, for instance, Anglo American is embroiled in a dispute with state-owned mining group Codelco over Codelco's wish to own a 49% stake in Anglo's lucrative copper mine Los Bronces.

Closer to home, in Zambia, president Michael Sata's new government last month announced plans to double the mineral royalty rate to 6% for base metals such as copper.

Even in countries that have historically been considered "investor-friendly" "resource nationalism" has been on the rise.

It was the Australian government that got mining companies and the markets panicking last year when it unexpectedly announced a new mining tax.

What does all of this mean to us here in South Africa?

Over the past two years, we have seen the rise of our own form of "resource nationalism" - driven mainly by the ANC Youth League's campaign for the nationalisation of the country's mines.

Whether the beleaguered youth league president Julius Malema is eventually forced to maak 'n plan as a cattle boer by the ANC's national disciplinary appeals committee or not, the nationalisation debate is not about to die.

Those who believe Malema's five-year suspension - if upheld by the Cyril Ramaphosa-led appeals committee - would mean the issue was now off the national agenda are in for a nasty surprise.

The ANC announced on Monday that its national executive committee has been presented with a report the party commissioned last year on nationalisation of mines.

Party general secretary Gwede Mantashe said the report was sent back to the research team for redrafting because NEC members felt it was too technical and that it would not be accessible to those supposed to discuss the report in ANC branch structures.

He also said case studies of the 12 countries the research team had visited would have to be included in the report.

Clearly - Malema or not - nationalisation of the mines will be a major topic of debate for the ruling party ahead of its national conference in December next year.

Opponents of the proposed move argue that the continued talk of nationalisation is scaring off potential investors and that, therefore, such a debate should be discouraged.

Even some of those in business and opposition parties who are agitating for an "economic Codesa" - an all-inclusive indaba at which all matters economic would be discussed - seem to be suggesting that nationalisation should be excluded from such an exercise.

Yet there is no better time for such a debate about the ownership of the country's mineral resources than the present.

In the early 1990s mining giants could easily shut down such talk with the threat of leaving, but the rise of "resource nationalism" around the world, means that such a threat does not carry as much weight today.

The current climate gives South Africa a rare opportunity to have a frank and robust debate about how its mineral resources can best be utilised to benefit its people and grow the economy at a faster rate.

Instead of banking on Malema's banishment to a cattle farm in Limpopo to silence the calls for nationalisation, the opponents of nationalisation should be presenting compelling alternatives.