Mantashe said this as Minister in the Presidency Trevor Manuel told a high-profile mining indaba in Cape Town yesterday that the nationalisation of South Africa's mines was not an option.

Mantashe, clearly irritated by continued speculation about the outcome of a report on mines nationalisation commissioned by the ANC, said the party would not be blackmailed by threats that investments would be withdrawn should nationalisation become government policy.

''One of the things I don't like . is the threat of not investing, of not coming, or of [investors saying if you nationalise mines] we will go away,'' Mantashe told journalists at Luthuli House in Johannesburg.

''The beauty of minerals is that they are not mobile. The beauty of it is that you will come and find them here. I don't think we should use the blackmail approach in discussing an important policy matter in the ANC. And I think even . the threat of [saying the nationalisation of mines] is unaffordable [should be discouraged].''

Weekend media reports said an independent panel that had carried out the study for the ANC on the feasibility of nationalising the mines had recommended that nationalisation be rejected because it was not affordable.

The study reportedly found that the government would need to raise about R1-trillion to buy out listed mining companies.

The report, which has still to be debated by the ANC, apparently recommends a less expensive approach of increasing taxes on mining giants as a way of deriving more benefit from the country's mineral wealth.

The report was discussed at the ruling party's national executive committee meeting at the weekend, and Mantashe said party members and stakeholders would soon be invited to comment on it.

Only then would the ANC adopt it as a discussion document at its national policy conference in Midrand in June.

"What is important is what [are] the best practices internationally in terms of managing mineral resources,'' Mantashe said. "Why are investors and companies prepared to go 50-50 [ownership] in diamond mines in Botswana, [but] say that we must not even discuss that?

"Why do companies say that they can work with a state company in Chile and in Brazil [but] if it is in South Africa [discussing it] is a no-no?" Mantashe said.

However, Manuel's message at the 18th Investing in African Mining Indaba in Cape Town yesterday was that the mining industry deserved policy certainty from the government.

"The Minister [of Mineral Resources, Susan Shabangu] was pretty forthright in saying that there will be nationalisation over her dead body.

"Now you couldn't ask for a clearer statement than that," Manuel told the indaba, which was attended by financiers, investors, mining professionals and government officials.

"The mining sector is so fundamentally important as a platform to construct the [upliftment] transition that we can't be able to take this idea of nationalisation forward," Manuel said.

"If some doomsayer comes along and generates another lie [about nationalisation], don't believe them," he said.

In May last year, Finance Minister Pravin Gordhan identified the mining industry as one of the sectors with potential to create jobs.

And in June, mining giant AngloGold Ashanti said the mining industry generated R424-billion in revenue in 2010, and spent R49-billion in new projects and new jobs.

In 2010, the mining sector contributed about 1million jobs to the economy, half of them directly, and more than 50% of merchandise exports.

Yesterday, the Industrial Development Corporation released a research report that revealed reasons South Africa is failing to capitalise on its mineral wealth.

Factors identified include the introduction of a new minerals regime, infrastructure constraints, safety issues, falling productivity attributed to a poor mining safety record, escalating costs, skills shortages and a volatile exchange rate, among others.

The report recommended that, on top of investing in energy and transport infrastructure, South Africa should address shortages of professionals, especially geologists and mining engineers, and safety measures.

The debate around state ownership intensified when suspended ANC Youth League president Julius Malema made repeated calls for nationalisation of mines and other key sectors of the economy as part of the league's call for economic freedom.

Despite reports that Malema's calls were a threat to foreign investment, Mantashe yesterday said nationalisation was not about the youth leader or the league.

Since Malema called for nationalisation, several cabinet ministers, including Manuel, Shabangu and Public Enterprises Minister Malusi Gigaba, have vocally opposed the idea, suggesting that the league's calls were irresponsible.

Manuel said last year: "This country desperately needs investment, more specifically investment in our rich mineral endowment.

"And, if for no other reason than we need investment, we must declare repeatedly that the nationalisation of the mines is a seriously bad idea.

"Even reading the medium-term budget with half a brain will confirm that there are no fiscal resources available through taxes or borrowing to pay for mines or invest in them, even if the government were to get these mines gratis." - Additional reporting by I-Net Bridge and Sapa