Mining not for sissies - Ramaphosa

Mbuyiseni Ndlozi (Mlungisi Louw)
Mbuyiseni Ndlozi (Mlungisi Louw)

Cape Town - Nationalising mines could result in a burden on the fiscus, said President Cyril Ramaphosa.

He was answering questions from MPs in Parliament on Wednesday. Economic Freedom Fighters MP Mbuyiseni Ndlozi asked Ramaphosa about the nationalisation of mines.

Ramaphosa said it is tempting to think nationalising mining companies which make a lot of profit could bolster state coffers. But there is also a burden to capitalise the mines which should be considered, he explained.

A mine could yield profits, but a mines are subject to commodities. If commodities tank, money will have to come from the fiscus, he explained. 

Ramaphosa said that the risks and dangers have to be examined. “You could be pouring money down the drain.”

He explained there is a risk in pouring billions into holes into the ground, and having to contend with volatile commodity prices.

Bust and boom

“Sometimes there are years of drought and years of boom. Mining in the most part can go bust or have great years of boom.” South Africa’s developmental state will be subject to those processes.

Ramaphosa advised Ndlozi to do research on the matter and engage with people “who have experienced it”. He added that Ndlozi should talk to new Mineral Resources Minister Gwede Mantashe about mining, as he has been in the industry.

“Mining is an industry that is not for sissies,” he concluded.


* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

ZAR/USD
16.77
(-0.03)
ZAR/GBP
21.15
(-0.12)
ZAR/EUR
18.95
(-0.03)
ZAR/AUD
11.66
(-0.03)
ZAR/JPY
0.16
(-0.09)
Gold
1798.22
(+0.06)
Silver
18.69
(+0.13)
Platinum
824.50
(+0.30)
Brent Crude
43.14
(+2.10)
Palladium
1961.36
(+0.61)
All Share
55417.89
(-0.66)
Top 40
51154.08
(-0.74)
Financial 15
10472.31
(+1.28)
Industrial 25
76134.69
(-1.67)
Resource 10
52483.78
(-0.20)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1961 votes
I am taking a hit, but should be able to recover in the next year
23% - 2569 votes
My finances have been devastated
34% - 3819 votes
It's still too early to know what the full effect will be
25% - 2748 votes
Vote