When President Cyril Ramaphosa announced during the Mining Indaba in Cape Town that 39% of South Africa’s mining industry was black-owned, applause and ululations filled the room. The industry celebrated its achievement with self-congratulatory gestures.
After all, transformation has remained a contentious issue since 1994. Eager to reshape an industry that had long been dominated by a handful of white conglomerates, the governing ANC attempted various strategies.
It enacted the Mineral & Petroleum Resources Development Act and implemented the Mining Charter. Still, progress toward transferring wealth to black people proceeded slowly, with resistance in some quarters.
The Mining Indaba, an annual gathering for mining elites now in its 30th year, presents a platform to engage with this contentious topic. According to the organisers, the event aims to promote and advance mining interests across the continent. No-one conceals the fact that the primary focus is to strategise on the extraction of raw minerals from beneath African soil, with many paying lip service to transformation.
While the media coverage was extensive, revealing themes such as regional development opportunities and investments in renewable energy, the primary focus remained on accumulation opportunities. Some, such as the Bench Marks Foundation, insisted that pressing concerns of ordinary people, such as increasing unemployment and black ownership in the industry, should be put on the table.
If the industry leaders fail to address the crises of poverty and inequality with genuine, effective solutions that go beyond preserving their own privileges, the marginalised may soon take matters into their own hands, giving their own practical meaning to their lived experiences.
It acknowledged that nationalisation becomes a more plausible prospect in situations of endemic or worsening inequality, particularly when natural resource revenues are perceived to be benefiting only a minority
Not so long ago, the mining industry was at sixes and sevens trying to fend off calls for the nationalisation of mines. It leaned on the government to protect its interests as discussions became heated. The industry protested, citing “policy uncertainty” and warning of adverse economic effects due to the discourse.
The emphasis was on how this discourse affected “investor confidence”, neglecting to address socioeconomic issues and the crucial question of wealth redistribution. In any case, investor interest in the country hasn’t been overwhelming since the transition to democracy. Factors such as corruption, prevalent both before and after democracy, along with high crime rates and unstable electricity, also play significant roles in investor hesitation.
But when the discourse on nationalisation reached the public sphere, the industry responded defensively. Despite numerous indabas, there has been no clear plan presented to address the marginalised, beyond highlighting the 39% ownership by unspecified black individuals, likely funded by loans from white-owned banks.
Of course, there were substantive issues emanating from the industry such as the 2011 position paper on state participation in mining by the Mining Industries Association of Southern Africa. It acknowledged that nationalisation becomes a more plausible prospect in situations of endemic or worsening inequality, particularly when natural resource revenues are perceived to be benefiting only a minority. They were explicitly describing South Africa. These bold views were not backed up by tangible and actionable plans for implementation.
In a country blessed with abundant mineral wealth that is one of the world’s leading mineral exporters, many endure profound poverty with limited prospects for improvement. Given the challenges of achieving substantive redistribution, innovative and potentially populist ideas may emerge from below, seeking change.
When the nationalisation debate gained momentum, its proponents articulated compelling arguments that posed significant challenges for rebuttal. Central among these was the notion of achieving equitable resource distribution, particularly in societies marked by stark inequalities like our own. In a country where poverty and affluence coexist side by side, such considerations carry undeniable weight.
While it may be tempting to attribute these disparities solely to our colonial and apartheid past, the shortcomings of post-apartheid capitalism are becoming increasingly evident. Advocates of the nationalisation discourse highlighted this undeniable reality.
They also drew parallels to the post-war era, during which devastated nations rebuilt themselves through nationalised industries. While the context may differ, the underlying human suffering remains similar. It is worth noting though that once these economies matured, they transitioned back to neoliberal policies, with privatisation taking precedence, as seen in the 1980s.
We were also reminded of instances where nationalisation experienced a resurgence, with countries such as Bolivia and Venezuela cited as examples. However, due to a variety of factors, they were not as successful as Scandinavian nations such as Norway, where nationalisation remained a consistent feature.
The UK was frequently cited as a prime example, much to the dismay of many, having developed through the nationalisation of industries such as railways, electricity, broadcasting, the central bank, road transport and steel production, among others. It was highlighted how many of the so-called “developed” economies owed their progress to policies involving state control of key strategic sectors in the economy. Opponents of nationalisation found it challenging to counter this argument.
Discussions about nationalisation offering promises of economic development and poverty alleviation resonate deeply with those grappling with socioeconomic challenges
South Africa’s current state exemplifies a laissez-faire capitalism that has led to acute social and economic problems. Platforms such as the indaba overlook the connection between a highly privatised capitalist economy and our intractable social challenges. The growing wealth and income inequality are not coincidental outcomes.
For the marginalised poor and working class outside the mainstream economy, arguments in favour of their interests are crucial. Discussions about nationalisation offering promises of economic development and poverty alleviation resonate deeply with those grappling with socioeconomic challenges, compelling them to pay attention.
Chris Malikane, a renowned economics professor, substantiated his endorsement of nationalisation with evidence. In 2011, South Africa ranked seventh globally in coal and iron ore production and fifth in gold production, he argued, yet despite its abundant mineral wealth, the country had little to show in terms of production output.
The solution seemed straightforward and was evident in the performance of numerous peer countries, some with a colonial legacy similar to South Africa’s. These countries were surpassing us not only in output volumes but also in critical developmental indicators such as employment, poverty reduction and inequality. Malikane pointed out that a common denominator among these countries was significant state ownership in the mineral extraction sector.
Some perspectives suggested that nationalisation could enhance efficiency, reduce production costs, and create more employment opportunities. Of course, nationalisation or state ownership does not necessarily equate to public ownership of mineral resources. Without structural changes to the economy, nationalised industries will still operate within a capitalist framework, perpetuating exploitation.
Nevertheless, without presenting compelling alternative solutions to address social and economic challenges, the country remains susceptible to innovative grassroots solutions, including nationalisation.
• Radebe is associate professor in the University of Johannesburg’s department of strategic communication and director of the Centre for Data and Digital Communications. He is the author of ‘Constructing Hegemony: The South African Commercial Media and the (Mis) Representation of Nationalisation’ (UKZN Press).
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