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South Africa: Mine Nationalization Effort Fails, But Problems Persist

South Africa will not nationalize its mining industry, said Deputy President Kgalema Molanthe this week, but the turmoil rippling through South Africa’s economy, and its political leadership, is not over.

“It is not going to happen,” Molanthe told the BBC, confirming that the mines would not be nationalized. The nationalization campaign was championed by Julius Malema, formerly the chairman of the Youth League of the African National Congress, who was first suspended, then expelled from the ANC in the past few months. Malema is known for confrontation and controversy, and he remains a popular figure among South Africa’s young and poor.

The ANC might have calmed investors and the markets by firmly resisting Malema’s calls to nationalize the mines, but even the mighty ANC has to watch its step.  Yesterday, tens of thousands of workers walked away from their jobs for a one-day strike in response to calls from the Congress of South African Trade Unions. COSATU wanted the strike to remind the ANC of its political clout. Coal and gold mines were especially hard hit, with 85 percent of workers at the world’s fourth-largest gold mine—Gold Fields—joining the strike. Meanwhile, the ANC Youth League (parts of which are close to COSATU) vowed to stand by Malema, its ousted leader; “We will continue to mobilize all branches and structures of the ANC to rally behind the call for nationalization of mines and expropriation of land without compensation,” said the Youth League deputy president. And Molanthe, the ANC’s deputy president, was forced to concede that he hopes Malema’s political career is not over.

The ANC’s older and more experienced leaders recognize that nationalizing the mines would be a disaster but haven’t been able to squash Malema; expelling him from the party deprived him his platform but it might not have seriously dented his popularity or influence.

South Africa’s uncertainty about key mining policy issues means the country, which should be booming with high commodity prices, hasn’t received the massive new investment its mines need to exploit global demand.  That’s a pity; that means the jobs and prosperity more investment would have brought—and that could help cool down the temperature in South African politics—won’t be coming.

Back when democracy in South Africa was still very young (Nelson Mandela had been elected but not yet sworn in), I was lucky enough to visit a working gold mine and one of the miners showed me how to use the drill.  It was hot and hard work, and you couldn’t forget that you were two kilometers below the surface of the earth, and that thousands of South Africans have died in mining accidents over the years.

Given the brutal exploitation of black South African miners under apartheid, and given COSATU’s roots in the struggle against it, it is perfectly easy to see why nationalization and wage hikes make sense to a lot of South Africans. The ANC leadership has the immensely difficult job of balancing the demands of current mine workers for better wages and working conditions, the hunger of the unemployed for new jobs to open up in the mines, and the priorities of multinational mining corporations who are focused on profit and predictability.

So far, they’ve done surprisingly well; South Africa’s performance since independence has surprised many who expected it to follow the Zimbabwe route. The question remains, though, is “surprisingly well” good enough?

At Via Meadia, our fingers are crossed.

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  • IanH

    Gold Fields is the name of the gold mining firm. There is no mine named Gold Fields.

  • Kris

    Our talk of nationalization has scared away the necessary foreign investment, therefore we must nationalize!

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