Should nationalisation ever be implemented in South Africa, it will be to the detriment of the country, Bravura Consulting MD Alana Bond warns.
“The country’s mining sector needs to be persuaded to transform but nationalisation is not necessarily the mechanism to do thatportable crushing plant of pegson,” she notes. The South African consulting company specialises in the design and implementation of black economic empowerment, corporate social responsibility and sustainable development strategies.
“The mining industry accounts for about 40% of our overall economy, which makes it an easy target for nationalisation. “There is a general perception that the mining sector is raping and pillaging South Africa and that all the money is going out of the country or to white people and black people are not getting any benefit,” she explains.
She adds there are mining companies that are doing rather poorly, such as beleaguered mine Aurora. “Forget community development – the company has not yet paid its employees. But there are some mining companies that are doing a lot of good work and that are really trying to drive social benefits, that are assitsing their communities and illustrating the benefits of mining.”
Bond cites platinum miner Royal Bafokeng Platinum (RBP) as a success story. “RBP is the owner of the land the mines operate on, which all started with a royalties scheme, whereby royalties were paid to the communities surrounding these mines. “This assisted the communities in developing and an enormous amount has already been done in that area. “In fact, it is one of the richest communities in the country,” she adds.
Bond states companies such as RBP are the epitome of true transformation. “Consid-ering that mines are forced to have 26% black ownership by 2014, as opposed to the Department of Trade and Industry codes where ownership is not an absolute requirement, it does seem like the mining companies are adding a lot of value to the country.”
Meanwhile, she says the financial implication of nationalisation will also be detrimental. “The African National Congress Youth League argues that there is a small percentage of people who have invested their pension funds in JSE- and dual-listed mining companies. “It is irrelevant how big or small that percentage is – the reality is you cannot take away entire life savings for the so-called promised benefit of the wider country,” she adds.
“Quite frankly, we have far bigger issues in this country, such as the National Health Insurance policy that is going to cost R225-billion up until 2020, as well as social grants costing the country a fortune. “We have infrastructure needs; we have roads that are falling apart with potholes – we have all of these needs and government has limited resources. “We need to choose carefully where we place those resources,” she notes.
She cites countries such as the US, Spain and Greece and warns that these are perfect examples that a country cannot borrow itself to a hilt. “Nationalisation will place the future of the entire country at risk,” Bond concludes.