THE nature of state intervention in mineral assets will be debated at this week's African National Congress (ANC) policy conference in Midrand.
The ANC has released a discussion document - Maximising the Developmental Impact of the People's Mineral Assets: State Intervention in the Minerals Sector - known as Sims.
According to the document, the minerals sector must be placed at the heart of the national development strategy, as it is SA's only natural resource sector that can be regarded as exceptional in global terms.
This would require co-ordination between government departments. The document suggests merging the departments of mineral resources, trade and industry, energy, public enterprises, economic development and science and technology to form a super economic ministry. The study found that nationalisation of mineral assets was not affordable as it would cost just over R1-trillion to acquire a 100% stake in all listed and non-listed mining companies. "This exceeds the entire government budget, which is expected to exceed R1-trillion for the first time in 2012-13."
"Nationalisation without compensation would require a change to the constitution and would result in a near collapse of foreign investment and access to finance. This route would clearly be an unmitigated economic disaster for our country and our people," the report reads.
Instead, the study proposes a 50% resource rent tax, or a super tax, which kicks in only when an investor has made a "reasonable return", so as not to deter investors. The State Minerals Company, which has already been decided on, should have the task of creating better access to strategic minerals, such as iron ore, coal and copper, to supply to the domestic market at competitive prices.
The ANC will meet in Midrand for four days, starting tomorrow, to discuss 13 policy documents ahead of its national conference in December.
Decisions made at the policy conference will then be discussed and finalised at the national conference in Mangaung in December.