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SAfrica to decide Thursday on gov't-owned mine firm
October 14, 2008 / 10:37 AM / 9 years ago

SAfrica to decide Thursday on gov't-owned mine firm

JOHANNESBURG, Oct 14 (Reuters) - South Africa may revamp a dormant state-owned firm to buy and run mining operations across the metals portfolio, but will not consider nationalisation of mining assets, a government spokesman said on Tuesday.

The company, African Exploration, Finance and Mining Corporation (African Exploration), is expected to operate alongside other mining firms in South Africa, but it was unclear in which sector it would focus its operations.

South Africa produces gold, platinum, diamonds, uranium, coal, iron ore and various base metals.

The sectors are dominated by global heavyweights, including Africa’s top gold producer AngloGold Ashanti (ANGJ.J), the world’s No. 1 platinum producer Anglo Platinum (AMSJ.J), and diamonds firm De Beers, 45 percent owned by global miner Anglo American Plc (AAL.L).

An advisory council will meet on Thursday this week and formally advise the mining minister on whether to revive the company or go for joint private sector and public companies.

The suggestion to revamp the company was proposed at a sector mining conference held last month where black-owned companies with little financing or expertise to operate mines suggested that the firm could run their assets.

Some participants suggested formation of state and private sector partnerships similar to Botswana’s diamond producer Debswana, which is jointly owned by that country’s government and top diamonds producer De Beers.

Other participants suggested nationalisation of assets already owned by private companies, or the taking away of any company’s rights, but the government would not consider this.

“The policy of nationalisation is not government policy, it is not an option and is not on the table,” Bheki Khumalo, a spokesman for the Department of Minerals and Energy (DME), said.

“We have no intention on the side of government to nationalise anything.”

He said only a minority had proposed nationalisation.

Jacinto Rocha a deputy director general at the DME has said the state will be involved in mining.

“If there are platinum opportunities, we are going to get involved, either directly as a miner or indirectly as a shareholder,” Rocha was quoted by South African media.

He said African Exploration, which has been in existence since 1944 would be revived.

Analysts declined to comment saying they awaited an announcement on what shape the new player would take and what role it could have in mining before commenting.

They pointed to the state-owned oil firm PetroSA, which rivals petrochemicals group Sasol (SOLJ.J) in the gas-to-liquid fuels sector as an example of how the new firm may work.

Reporting by James Macharia; editing by Michael Roddy

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