* Push for nationalisation motivated by "something else"
* Nationalisation could destroy fiscal stability
(Recasts with background, analyst comment)
By Agnieszka Flak and Ed Stoddard
JOHANNESBURG, July 13 Nationalisation of South
Africa's mines needs to be debated and not dismissed, the head
of Africa's top gold miner said on Wednesday as he warned that
such a move could destroy the country's fiscal stability.
The comments by Mark Cutifani, the chief executive of
AngloGold Ashanti , are the latest from top miners on
the issue, underscoring boardroom concerns that talk of
nationalisation by radical elements in the ruling African
National Congress are making investors and shareholders nervous.
In a letter published in the Business Day financial daily,
Cutifani said the push for nationalisation of South Africa's
mines, led by the Youth League of the ANC, was motivated by
"something else" than a call for greater social change.
"Surely nationalisation cannot mean what it might be taken
literally to mean: the acquisition by the state, with or without
compensation, of all the country's mining assets," he wrote.
"If compensation is paid, it would destroy South Africa's
fiscal stability," he said, adding that if companies were not
compensated, it would destroy the finances of many average South
Africans who would had invested in companies either directly or
via pension funds.
Nationalisation in South Africa would have global market
implications as it has by far the largest platinum reserves in
the world and remains a top gold producer.
It is not ANC or government policy at the moment but the
influential Youth League is trying to change that.
Much of the political impetus behind Youth League leader
Julius Malema stems from the failure of post-apartheid
affirmative action, or "empowerment", to spread wealth and
control of the economy beyond whites and a small black elite.
Malema's rhetoric about nationalisation and seizure of
white-owned farms without compensation has unsettled domestic
and international investors, not least for its parallels to the
disastrous policies of President Robert Mugabe in neighbouring
Mugabe's government began seizing white-owned farms over a
decade ago, ruining the harvests of a regional breadbasket, and
it is now demanding majority local stakes for black investors in
foreign-owned mining companies.
Cutifani said that while the industry may have failed to
meet some of the transformation targets and more needed to be
done, much had been achieved to spread wealth and benefit
previously disadvantaged black South Africans.
He said he supported the recently created state-owned mining
company, which some said should be the extent of state
involvement in the industry.
"The state-owned mining company offers further
opportunities. We offer all reasonable support," he said.
His comments follow those of Anglo American chief
executive Cynthia Carroll who said in late June that governments
in mineral-rich countries must steer clear of the "blind alleys"
Anglo gets about half of its operating profits from South
Africa where its units include Anglo American Platinum ,
the world's largest primary platinum producer which accounts for
about 40 percent of global supply.
"The miners are concerned about being silent on the issue
and they feel they need to weigh in on it. Otherwise it is a
one-side tirade from Julius Malema and the Youth League," said
Gary van Staden, a political analyst with NKC Independent
"They have decide they need some voice in the debate because
if the tirade stays one-sided then there is a negative impact on
investor sentiment both direct and indirect," he said.
(Editing by Marius Bosch)