BEE 'failed to transform SA mining'

Black shareholders own less than 8% of the country's R386-billion platinum mining industry, making the sector ripe for state intervention, a prominent black financial advisory service said in a report just out.

In the report commissioned by the South African Mining Development Association, Kio Advisory Services argues that black economic empowerment has failed to transform the platinum sector.

"Therefore, we call for government and other stakeholders to start a national dialogue that will develop a national vision, plan and industrial strategy for the mining sector, with working groups for the PGM industry and other commodity groups," the report says.

Kio, launched and owned by Duma Gqubule, indirectly supports ANC Youth League leader Julius Malema's call for nationalisation of the country's mines as a means to break the historic white stranglehold on the resource economy.

"We reject with utter contempt the illogical view of the SACP that state ownership in mining is a ploy to bail out BEE shareholders. In the case of the listed platinum sector there are no BEE shareholders to bail out at holding company level," the report says.

"We believe that state ownership can be an effective tool to drive industrial upgrading and transformation.

"Therefore, the state must over time build up its involvement at ownership level to drive the industrial policy objectives for the sector from the board level."

The report proposed that a "quick win" would be for the state-owned Public Investment Corporation (PIC) to increase its shareholding in Implats - the country's second-biggest platinum miner with a 32% share of national production - from 8.5% to 13.5% at a cost of about R6-billion.

"It could then become the joint-controlling shareholder with the Royal Bafokeng Nation in the world's second-largest platinum producer," the report says.

Trade and industry minister Rob Davies has proposed in his industrial policy action plan that the PIC should use some of its huge asset base to invest in developmental projects.

"We believe that there must be state involvement in strategic sectors of the economy, especially in finance and banking," he said.

"For example, if the industrial policy dictates that there should be a significant depreciation of the currency, there would be a windfall for shareholders. The state has a right to participate in such a windfall as a shareholder."