Maybe it will only be proper to begin with understanding the economic reasoning behind the barking of the word “Nationalisation” and emotional reasons will be over-shadowed by economic sense. The saddest scene to be witnessed is one advocating for something he/she is clueless about. Many cannot even define the word “Nationalization”. Yes, it is very true that the mining sector is a key commanding height of our economy. At its best, in 2007, the primary sector of the South African economy was dominated by agriculture and mining, the former contributing 2, 7 % and the latter contributing 7, 9 % of Gross Domestic Product (GDP) (Mohr et al., 2008, p. 76). Yet we witness people uttering statements calling for “Nationalization” of mines and reflecting a climax of confusion with regard to their knowledge of how the economy works and the impact Nationalization can have on the economy of the country. As we advise for all “Street Fighters” to read “Nationalization beyond the slogan” by Keith Coleman.
The barbarian in me surfaces when I read the economic reasoning behind Nationalization of mines; but sense kicks in immediately after I flirt with the idea of the possibility of nationalizing mines especially when I think about the current Leadership structure our country have... The economic reasons for nationalisation may include: diversification and expansion and responding to climate change, redistribution of wealth (incomes) nominal and real incomes, redistribution of services, to socialise commodities, correcting failure of the market mechanism, preventing “natural monopolies” and “unnatural” monopolies, addressing structural efficiencies, filling an investment gap, creating and preserving employment, a response to economic or profitability crisis, cost-benefit optimisation, to achieve economies of scale, to increase productivity, gaining access to further points in the value chain, changing employment practices, as a response to international developments in the industry, to assist economic planning by the state, overcoming inefficiencies at national level, stabilising and macro-economic objectives and transforming control into ownership (Coleman 1991; Cohen, pp. 19). All the above leads to the question of “Skill” and the capacity run the mines. This looks so go good in text. But can we go take a glimpse into the running of Government supported institutions like, SABC, ESKOM, TRANSNET, SAA etc.
Maybe we should ask ourselves the following questions: Do we have the necessary skills and capacity to run the mines? Which method of Nationalization will be most suitable for South Africa? Is the current economic setting fertile for Nationalization of mines? If the mining investors pull out of SA, leave with their means of production, how are we going to carry on? Are we ready to sacrifice a generation while accommodating the transition process of nationalizing the mines?
But then the barbarian in me kicks in again with the following questions: What happens to the huge profits that our mines are generating? Who are the real beneficiaries in the current setting in the mining sector? What will be left there for us to us show when our mining resources are depleted? Who will be left with the environmental problems caused by mining activities especially when minerals are no more (e.g. Acid problem in Gauteng)?
THE BIG QUESTION IS: SHOULD WE NATIONALIZE THE MINING SECTOR IN SA????
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