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State mining company is govt’s prerogative - Cynthia Carroll

Source: Mining Weekly Date: 27 October 2010

JOHANNESBURG - The creation of a State mining company is the prerogative of the South African government, Anglo American CEO Cynthia Carroll said in Johannesburg on Wednesday night.

Carroll told at a well-attended gathering at GIBS university: “This is a matter for the South African government to decide. All we ask is that there is a level playing field with the private sector.”

But in sharp contrast to being neutral on the State’s participation in the mining industry through a level-pegging State-owned company, Carroll was implacably opposed to mine nationalisation.

“Nationalisation simply does not work. It hinders the development of a private mining industry. It harms industrial growth and industrial competitiveness and it restricts social and economic transformation,” Carroll said.

It was important, she added, to distinguish between the custodianship by the State of unmined mineral resources, the investment in mining by a State-owned company, and mine nationalisation.

On State ownership of unmined mineral resources, she outlined how Anglo American had embraced the Mineral and Petroleum Resources Development Act of 2002 as well as the Mining Charter with such verve that the company was four years ahead of schedule in converting its old-order rights to new-order rights.

“We’ve done this very successfully. We’ve achieved the 2014 target of 26% asset empowerment in all of our South African operations and carried out several landmark transactions to support the creation of major competitive black economic empowerment (BEE) operators.

“As a result, we’ve been granted the conversions of all of our licences. We’ve also taken great steps in relation to employment equity and procurement,” she said.

Historically disadvantaged South Africans currently held 46% of the company’s management positions; 13% of South African employees were women, compared to a target of 10%; and 19% of South African managers were women.

Since 2002, BEE procurement had increased tenfold to R24-billion and Anglo American was in a position to make further progress on employment equity and procurement to meet the requirements of the Revised Mining Charter.

It was on mine nationalisation that she took the most rigorous of antagonistic positions, however.

“Let me be absolutely clear on this. Nationalisation is not the policy of the South African government. Leading figures in the government have stated their position that it never should be the policy, and we completely support this position.

“We have very good reasons for this, and what is crucial for South Africa is that it has it has a stable and positive environment for business, so that its mineral resources can be developed for the benefit of the people. The experience of countries around the world has demonstrated time and time again that nationalisation does not achieve this,” Carroll said.

She recalled that Anglo American had direct experience of nationalisation when its Zambian copper mines were nationalised nearly 40 years ago.

“Decades of neglect followed and rendered the industry uncompetitive on the world stage,” she said.

Even though the private sector had been back in Zambian mining for ten years, production had still not returned to pre-nationalisation levels.

Instead of considering the damaging path of nationalisation, she said that the road ahead for South Africa should be one of building the country’s energy, rail, port and water infrastructure, to enable the country to maximise the development of its mineral wealth.

“As a nation, we cannot afford to miss the benefits that will come with the next wave of growth, as we have done in the recent past.”

She reiterated that the fundamentals of the mining industry were strong, powered by the growth of China, India and other emerging countries, and that South Africa was ideally placed to benefit from those prospects.

“The South African people have achieved amazing things over the last 20 years. I believe in South Africa. I am confident that this nature will meet the challenges.”

She saw South Africa’s future as being “hugely exciting” and promised that Anglo American would play its part in building that future.

JOHANNESBURG - The creation of a State mining company is the prerogative of the South African government, Anglo American CEO Cynthia Carroll said in Johannesburg on Wednesday night.

Carroll told at a well-attended gathering at GIBS university: “This is a matter for the South African government to decide. All we ask is that there is a level playing field with the private sector.”

But in sharp contrast to being neutral on the State’s participation in the mining industry through a level-pegging State-owned company, Carroll was implacably opposed to mine nationalisation.

“Nationalisation simply does not work. It hinders the development of a private mining industry. It harms industrial growth and industrial competitiveness and it restricts social and economic transformation,” Carroll said.

It was important, she added, to distinguish between the custodianship by the State of unmined mineral resources, the investment in mining by a State-owned company, and mine nationalisation.

On State ownership of unmined mineral resources, she outlined how Anglo American had embraced the Mineral and Petroleum Resources Development Act of 2002 as well as the Mining Charter with such verve that the company was four years ahead of schedule in converting its old-order rights to new-order rights.

“We’ve done this very successfully. We’ve achieved the 2014 target of 26% asset empowerment in all of our South African operations and carried out several landmark transactions to support the creation of major competitive black economic empowerment (BEE) operators.

“As a result, we’ve been granted the conversions of all of our licences. We’ve also taken great steps in relation to employment equity and procurement,” she said.

Historically disadvantaged South Africans currently held 46% of the company’s management positions; 13% of South African employees were women, compared to a target of 10%; and 19% of South African managers were women.

Since 2002, BEE procurement had increased tenfold to R24-billion and Anglo American was in a position to make further progress on employment equity and procurement to meet the requirements of the Revised Mining Charter.

It was on mine nationalisation that she took the most rigorous of antagonistic positions, however.

“Let me be absolutely clear on this. Nationalisation is not the policy of the South African government. Leading figures in the government have stated their position that it never should be the policy, and we completely support this position.

“We have very good reasons for this, and what is crucial for South Africa is that it has it has a stable and positive environment for business, so that its mineral resources can be developed for the benefit of the people. The experience of countries around the world has demonstrated time and time again that nationalisation does not achieve this,” Carroll said.

She recalled that Anglo American had direct experience of nationalisation when its Zambian copper mines were nationalised nearly 40 years ago.

“Decades of neglect followed and rendered the industry uncompetitive on the world stage,” she said.

Even though the private sector had been back in Zambian mining for ten years, production had still not returned to pre-nationalisation levels.

Instead of considering the damaging path of nationalisation, she said that the road ahead for South Africa should be one of building the country’s energy, rail, port and water infrastructure, to enable the country to maximise the development of its mineral wealth.

“As a nation, we cannot afford to miss the benefits that will come with the next wave of growth, as we have done in the recent past.”

She reiterated that the fundamentals of the mining industry were strong, powered by the growth of China, India and other emerging countries, and that South Africa was ideally placed to benefit from those prospects.

“The South African people have achieved amazing things over the last 20 years. I believe in South Africa. I am confident that this nature will meet the challenges.”

She saw South Africa’s future as being “hugely exciting” and promised that Anglo American would play its part in building that future.

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