Mantashe: Leave mining out of sovereign wealth fund plans

accreditation
Minister of Mineral Resources Minister Gwede Mantashe
Minister of Mineral Resources Minister Gwede Mantashe

Mineral Resources Minister Gwede Mantashe has revealed that he objected to a proposal of using the mining industry as one of the mechanisms to fund the country's mooted sovereign wealth fund.

Mantashe said the idea was raised in the ruling party circles in the late stages of the drafting of the Mining Charter.

"There was a discussion about creating a sovereign wealth fund, which is a good concept. It works everywhere in the world where there are resources, whether it is mining, oil or gas,” Mantashe told leaders of the mining industry during his address at the Joburg Indaba.

“I said to them 'you cannot milk the industry which is already on its knees',” he told delegates.

Mantashe, who became Minister in February stressed the importance of transformation as outlined in the charter which was gazetted last month.

He stressed that for the industry to be competitive, it has to be transformed and that companies must not see transformation as a requirement only needed to tick the BEE score card.

Talk of setting up a sovereign wealth fund gained momentum this year, with the ANC proposing during its legotla in July that the fund must be established before the start of the next term of government.

According to a report by City Press, the ANC Legotla proposed that a sovereign wealth fund would enable government “to provide a steady resource for national development objectives”.

However, the country’s stagnant economy, which slipped into recession this year after the gross domestic product (GDP) declined 0.7% in the second quarter, might put brakes on the ruling party's ambitious plan.

Key economic indicators, including investor confidence, has also been declining. Last month, government announced a R50bn economic stimulus in a bid to boost recovery and stimulate job creation.

Only six African countries, namely Angola, Nigeria, Libya, Rwanda, Botswana and Morocco, are part of the International Forum of Sovereign Wealth Funds.

Mantashe urged bosses of the mining industry to refrain from talking down the sector, adding that he was still confident the industry was a critical player in boosting the economy.

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

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
14.74
+0.1%
Rand - Pound
20.53
-0.1%
Rand - Euro
17.47
-0.0%
Rand - Aus dollar
10.88
+0.0%
Rand - Yen
0.13
-0.0%
Gold
1,815.15
+0.4%
Silver
25.20
+0.9%
Palladium
2,637.59
+0.4%
Platinum
1,077.89
+0.6%
Brent Crude
74.74
+0.4%
Top 40
62,369
0.0%
All Share
68,526
0.0%
Resource 10
70,272
0.0%
Industrial 25
87,347
0.0%
Financial 15
12,825
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
In light of the recent looting, do you think a basic income grant is the right approach to deal with SA’s hunger and poverty problems?
Please select an option Oops! Something went wrong, please try again later.
Results
It will go a long way in helping fight the symptoms of SA’s entrenched inequality, especially for those who are starving right now
20% - 1425 votes
SA’s problems are complex, and we instead need to spend that money on building and growing our economy, which will help the country in the long run
31% - 2213 votes
All grants are a problem as they foster a reliance on handouts
49% - 3511 votes
Vote