South Africa's ruling African National Congress (ANC) has rejected calls to nationalise the country's mines but supports a windfall “resource rent” tax on mining firms, according to a draft policy document seen by Reuters on Wednesday.
“The state must capture an equitable share of mineral resource rents and deploy them in the interests of long-term economic growth, development and transformation,” the draft of party's economic policies said.
The “resource rental tax” is effectively a windfall levy of 50 percent that will kick in after investors have made a “reasonable return”. As such, it is meant to leave marginal or junior operations unaffected.
The ANC also recommended increasing “the supply of coal at competitive prices with the aim of containing energy costs” but did not provide any details of how to achieve that end.
At a five-yearly conference in the central city of Bloemfontein, the party has been at pains to strike a business-friendly note after strident calls this year for radical policy shifts to help solve South Africa's myriad social problems.
The election of millionaire businessman Cyril Ramaphosa as ANC deputy president has been interpreted as favourable to investment and the economy, particularly if Ramaphosa is able to push through plans to boost long-term growth.
The ANC also said monetary policy should stick to its current inflation-targeting regime, squashing calls from the party's union and communist party allies to broaden the central bank's mandate to include jobs and growth.
The party also said the government should consider tax breaks for employers to hire young job-seekers to tackle the chronic unemployment that is fuelling unrest among the millions of blacks who have seen little improvement in their lives since the end of apartheid in 1994. - Reuters