Deputy President calls for more state involvement in South African mining

Tallk of nationalizing South Africa's mining industry may have quieted down recently, but that hasn't stopped some government officials from fanning the flame. reports Deputy President Kgalema Motlanthe saying more state intervention is needed in the industry:

"Contrary to the view that there must be less state involvement in the economy, the lessons from the recent economic and financial crises… [is] that more state involvement is sought," Motlanthe told the ninth international mining history congress in Johannesburg.

Motlanthe said it was not sustainable to have a mining industry which used national resources almost exclusively to enrich a small minority.

In February Godfrey Oliphant, deputy minister for mineral resources, rejected the notion of nationalizing the industry as advocated by some in the ANC, but stressed the government is going forward with its "benefication policy." Proposals for increased state involvement include raising taxes on the sale of mining rights, a tax on super-profits, and potentially nationalizing platinum through "targeted interventions."

While the more radical faction of the ruling ANC party, led by firebrand Julius Malema, spearheaded a drive for nationalization last year, the idea has been studied by the party and deemed unaffordable, considering the government would need to raise some R1 trillion ($125 billion), more than its entire budget, to buy out existing mining firms. Malema has since had his membership in the ANC suspended after an anti-corruption police unit probed his business dealings and an accusastion of  “bringing the organization into disrepute” over an unrelated matter was upheld.

Production at South Africa's mines have shown a dramatic decline recently, according to a report from Statistics South Africa released this week.

In its February production and sales report, Statistics South Africa said total mining output retreated 14.5% from a year earlier, the greatest rate of decline since March 2008 when the world was gripped by the financial crisis.

More dramatically the overall output and sales from the resources industry in the African nation is now the lowest since 1961, according to a graph from Mike Schussler—that was the year South Africa left the British Commonwealth and declared itself a republic; the start of a long period of isolation that only ended with the election of Nelson Mandela as president in 1994.

 Image of Kgalema Motlanthe sourced from Youtube.