The nationalisation of South Africa's mines would cost R1.4-trillion - or, put differently, would treble South Africa's national debt overnight. Nationalisation of the mining sector is thus quite clearly the pipe dream of radical populists who are completely out of touch with reality.

Nationalisation is an unaffordable, untimely and frankly unnecessary suggestion, which has already undermined market stability. With so many jobs in our mining sector at stake, it is downright irresponsible to talk about placing this key sector of the economy in the hands of government bureaucrats.

The figure of R1.4-trillion also excludes additional running costs and the costs associated with operating loss-running mines, as government would no doubt intend to do. It goes without saying that our fiscus cannot afford such a project. In fact, calling for the "nationalisation of mines" is similar to asking for a nationalisation of agriculture or financial services. The mining sector is simply too big to be bought.

It is staggering, then, to note that the chairperson of the portfolio committee on mines, Fred Gono, has placed the issue of nationalisation of mines firmly on his committee's agenda. The flaws to the nationalisation argument are so evident as to question the intelligence and capacity of any person seriously suggesting it as a policy option.

The alternative is outright expropriation of property, which is unconstitutional. As such, to suggest that the nationalisation of mines is even a possibility is to consider advancing one of the following policy actions:

• Scrapping the constitutional right to property, or
• Increasing government debt by R 1.4 trillion

The DA has maintained that issues such as burdensome regulations and a weakening infrastructure should receive attention in order to further the growth and competitiveness of South African industry in general and especially the mining sector. The ANC leadership would do well to remember the global economic downturn and the subsequent shortage of funds internationally. Investors need to be assured of the safety of their capital, especially in these difficult times, and jobs need to be safeguarded by sensible growth-orientated policies. Mindless political rhetoric should be kept out of institutions tasked with important matters.

Statement issued by Dion George MP, Democratic Alliance shadow minister of finance, July 8 2009

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