Details sketchy on state mining

Details of the new state-owned mining company are still sketchy, following a cabinet announcement this week that the African Exploration, Mining and Financing Corporation (AEMFC) will be separated from the Central Energy Fund (CEF).

The AEMFC, a subsidiary of the CEF, will become a stand-alone entity and the nucleus of the mining company.

The establishment of a state mining company was a resolution at the ANC's Polokwane conference in 2007, and was also called for in the National Growth Path unveiled recently.

The Department of Mineral Resources and the Department of Energy will decide how to split the AEMFC from the CEF.

Department of Mineral Resources spokesman Zingaphi Jakuja said there was no time frame for the process.

Jakuja also said there was no indication of the type of mining that would be targeted.

The AEMFC has prospecting licences for, among other things, coal and iron ore.

Jabu Maphalala, spokesman for the Chamber of Mines, an umbrella body for private sector miners, said a state company was a government prerogative.

"Our position is that we do not have a say in what the government does and does not do," he said. "We hope it will ensure that the company operates in the same manner that other mining companies operate and therefore does not get preferential treatment."

AEMFC has been involved in several controversies since its establishment late in 2007.

It was exempted from key provisions of the Mineral Resources and Petroleum Development Act governing prospecting and mining rights. This included exemptions from carrying out environmental studies.

The company enraged Western Cape wine farmers by lodging applications to prospect in the winelands. It also applied for prospecting rights on 273 properties in Mpumalanga, some of which are in important, environmentally sensitive areas.

Last month the company was granted 27 prospecting licences across seven of the nine provinces.