File image: Reuters

South Africa must establish a state-owned mining company through an act of Parliament, Mpumelelo Gona, the chairman of the portfolio committee on mineral resources, said at a committee briefing yesterday.

The briefing was held to discuss last year’s tour by the committee to Chile and Bolivia to study state-owned mining companies. It is believed that the briefing was delayed until the ANC’s task team had completed its own report into the implications of the nationalisation of mines.

The committee’s report and the recommendations outlined generally support the conclusions of the ANC’s report.

Gona said that South Africa was in a similar situation to that of Chile and that the direction of the state-owned mining company “is the right one if we want to address the needs of our country”. He noted: “The devil comes in the detail of that company; how do we model that company so that we don’t create an animal that becomes super-imposed on the industry and is difficult to manage.” Gona added that it was also important to ensure that a state-owned company did not end up in the hands of people “who would take us back to the situation we are trying to escape from”.

He said that the members had been impressed with Codelco, the Chilean state-owned mining company, which is the largest copper-producing company in the world.

“The success of Codelco makes it easy for us to recommend a state-owned entity, which would deal with our country’s triple ills of poverty, unemployment and inequality.”

The DA’s Hendrik Schmidt acknowledged that Codelco was an example of a successful state-owned company, but pointed out that the committee had also visited the Bolivian Mining Corporation, and that all the members had judged that to be a disaster.

Schmidt noted that a government representative in Chile had said that if he could privatise Codelco, he would. However, Gona said the workers had told members of the committee: “Over our dead bodies will Codelco be privatised.”

The state-owned mining companies in South Africa are Alexkor and African Exploration, Mining and Finance Corporation.