The ANC will cause more miners to lose their jobs
If the ANC wants to cause more job losses in the mining industry then it is going about it the right way. None of the policies being proposed at its policy conference will lead to the revival of South Africa's mining industry. All of them will result in decreased investment, less mining, fewer jobs in mining and a weakening of our economy.
The ANC seems only able to respond to the current difficulties in the mining industry with proposals that will make it more difficult to mine. The effect of any of the proposed policies, from outright nationalisation to a resources super tax, will be to make mining a less attractive destination for investment. Without new investment mining will continue the gradual decline of the past few years which led us to February's mining output being the lowest in 50 years.
The latest madness comes from Paul Jourdan, one of the authors of the ANC's State Intervention in the Minerals Sector (SIMS) report. He was quoted this morning as saying that if mining companies don't become involved in the downstream beneficiation of the minerals they mine, they should leave South Africa.
Sometimes beneficiation simply does not make economic sense, as is the case in South Africa right now, with smelting operations being closed or put on part-time because of a lack of electricity.
In general though, the ANC seems unable to understand the concept of focus. Mining companies mine, and are good at mining or they will not stay in business for long. They are not specialists in beneficiation and to try and force them to be so will ensure that they operate less efficiently. That will make operations here less attractive.
For those companies that are already here, the rising costs forced on them by such a strategy would encourage them to mine only the high-yield parts of mineral bodies, thus leading to a truncated mine-life, shorter-term jobs and losses to the economy.
Rather than seek new regulation the ANC should throw much of the current mining regulation on the scrap-heap. It should replace it with carefully designed laws that encourage the maximum possible growth in mining balanced with the maximum possible government earnings in tax.
A larger sector would mean more money flowing into government coffers and more South Africans finding jobs in the mining industry.
Failure to do this will confirm that the only South Africans whose jobs the ANC cares about are the jobs of ANC politicians.
Statement issued by James Lorimer MP, DA Shadow Minister of Mineral Resources, June 26 2012
Click here to sign up to receive our free daily headline email newsletter
