Nationalisation - Alexcor failure bad omen

2011-03-10 17:59
Cape Town - Alexcor's precarious situation shows that nationalising the mines will be a serious mistake, the Freedom Front Plus said on Thursday.

"The state's diamond mining company is effectively bankrupt. If ever one wanted proof what is to happen to our country's mines should they be nationalised, one has to look no further than the Alexcor fiasco," FF Plus spokesperson Anton Alberts said in a statement.

According to the auditor general's general report on national audit outcomes for 2009/2010, the company did not have enough financial reserves to meet its operational cash-flow requirements.

The AG also had serious concerns about the company's ability to continue functioning in future if it did not reach an agreement with the local community and start sustainable mining activities.

"These findings should be read against the backdrop of certain elements in the ANC government, especially under the 'huge intellectual leadership' of [ANC youth leader] Julius Malema, who is prescribing to South Africans that the nationalisation of mines is in the interest of everyone," Alberts said.

Future bleak

Only last weekend Malema again called for the nationalisation of at least 60% of the ownership of all mines, with specific reference to Anglo American.

"In contrast to this road to a socialist utopia, the reality is that the state cannot even profitably manage its oldest mining company."

The forecast for the state's second mining company, the African Exploration Mining and Financing Corporation (AEMFC), for a profitable future looked as bleak, given Alexcor's retrogression.

The state could not even fulfil its core obligation of rendering public services, so it was much more likely that the state would fail to manage a business on the periphery of the state's focus, he said.


Nationalisation and state management of businesses "is wrong".

The state should create only the environment for business to flourish.

"That is why the emphasis should move away from a huge state machinery which interferes everywhere, whether in the private sector or in private lives, and focus on the development of entrepreneurs and the creation of an environment in which they could innovate and trade on a level playing field.

"That is the prerequisite for the establishment of a sustainable environment in which permanent job opportunities are created."

The FF Plus had asked parliamentary questions to determine who was funding the state's mining company.

"If taxpayers' money is being used, it is a shame and the party will consider further steps to stop the continued wasting of public funds," Alberts said.

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