Another bad ANC idea about mining

20 October 2022

The ANC, EFF, AIC and ATM have approved a budget report which calls for the state to explore, mine and process all newly discovered mineral deposits.

The DA was the only party on the Portfolio Committee on Mineral Resources and Energy to oppose the recommendation in the report which will go to Parliament for approval.

The DA is opposed in principle to the existence of the state owned mining company, the African Exploration And Mining Finance Company (AEMFC) which has been plagued by management and corruption issues similar to those in other state owned entities. To propose a dominant role raises several issues.

The wording of the recommendation, “Ensure that the AEMFC collaborate with the CGS, Mintek and other relevant stakeholders to prioritise and ensure that all newly discovered mineral deposits are explored, mined and processed by the state” clearly implies a requirement of involvement by the state mining company in all new mining operations.

This has huge implications for investment in and the sustainability of South Africa’s mining sector. It suggests mining investors and private companies will be disallowed from mining deposits that they find. This would render useless the government’s intention to increase the amount of private prospecting in South Africa.

At a time when the government is squeezed for cash, it is difficult to imagine where expansion capital for new state mining company operations will be found, and if it is found, what services, be they schools, hospitals or police, would lose out.

The ANC may claim it was merely their wording of the recommendation which was unclear but South Africans and the mining sector in particular should have no doubt that if it were possible, the ANC would prefer that the state mining company would be the only company allowed to mine in South Africa.

This is economic illiteracy at its worst and a sure recipe for disaster.

Issued by James Lorimer, DA Shadow Minister of Mineral Resources, 20 October 2022