Should we na­tion­alise the mines?

The SACP deputy gen­eral sec­re­tary and the ANC Youth League pres­i­dent beg to dif­fer

Weekend Argus (Saturday Edition) - - ISSUES -

ANC YOUTH League pres­i­dent Julius Malema has called for the na­tion­al­i­sa­tion of the mines. The me­dia have latched on to Malema’s call with de­light. They hope to ridicule the de­mand and goad se­nior ANC and gov­ern­ment leaders into ban­ish­ing any thought of na­tion­al­i­sa­tion, once and for all.

Malema hasn’t al­ways helped his case with off-the-wall sound­bites. The im­pres­sion of a pol­icy be­ing made on the hoof, in­di­vid­u­al­is­ti­cally, is re­in­forced by the fact that we are yet to see any se­ri­ous at­tempt at a col­lec­tive pol­icy doc­u­ment from the ANCYL.

The ques­tion of the own­er­ship and con­trol of our ma­jor nat­u­ral re­sources and means of pro­duc­tion is a se­ri­ous mat­ter. The idea of pub­lic own­er­ship should not be re­duced to an empty slo­gan. Nor is it an em­bar­rass­ing se­cret from a by­gone era, best left hid­den away in our fam­ily cup­board.

The ba­sis for Malema’s ar­gu­ment rests on the in­spir­ing clause in the Free­dom Char­ter: “The Peo­ple Shall Share In The Coun­try’s Wealth!” It as­serts that: “The na­tional wealth of our coun­try, the her­itage of all South Africans, shall be re­stored to the peo­ple; The min­eral wealth be­neath the soil, the banks and mo­nop­oly in­dus­try shall be trans­ferred to the own­er­ship of the peo­ple as a whole…”

Some have tried to ar­gue that the Free­dom Char­ter nowhere uses the word “na­tion­al­i­sa­tion”. This is not a very con­vinc­ing ar­gu­ment.

Any­one who has the re­motest ac­quain­tance with the mid-1950s, when the Free­dom Char­ter was for­mu­lated and adopted, would re­alise it was the hey­day of na­tion­al­i­sa­tion across the globe.

The framers of the Free­dom Char­ter were al­most cer­tainly think­ing of some kind of na­tion­al­i­sa­tion as a MEANS to en­sur­ing own­er­ship by “the peo­ple as a whole”.

But it is also mis­lead­ing to de­con­tex­tu­alise some sen­tences from the Char­ter’s over­all thrust. It is crit­i­cal to con­nect all clauses to the very first clause: “The Peo­ple Shall Gov­ern!” This refers to four in­ter­re­lated di­men­sions of pop­u­lar democ­racy: elec­toral, ad­min­is­tra­tive, con­sti­tu­tional democ­racy and par­tic­i­pa­tory.

The Free­dom Char­ter doesn’t say: “The gov­ern­ment shall gov­ern”. It says: “The PEO­PLE shall gov­ern”. A pro­gres­sive gov­ern­ment and a pro­gres­sive rul­ing party (or par­ties) are im­por­tant, but they are means (not ends) to the pop­u­lar democ­racy en­vis­aged.

Which is why, when the Free­dom Char­ter speaks of trans­fer­ring the com­mand­ing heights of the econ­omy to the own­er­ship of the peo­ple as a whole, it is not con­fin­ing it­self to a nar­row bu­reau­cratic take-over by the state ap­pa­ra­tus and a rul­ing party’s “de­ploy­ees”. Nazi Ger­many, fas­cist Italy, and Ver­wo­erd’s apartheid South Africa all had ex­ten­sive state own­er­ship of key sec­tors of the econ­omy.

What are the ac­tual mer­its of call­ing for the na­tion­al­i­sa­tion of the mines in SA in the year 2009? Many have re­sponded to Malema by ar­gu­ing that the “Min­eral and Petroleum Re­sources De­vel­op­ment Act” (2002) has al­ready im­ple­mented the Char­ter’s call for “the min­eral wealth be­neath the soil” to be “trans­ferred to the own­er­ship of the peo­ple as a whole”. In terms of this Act, pri­vate (or pub­lic) en­ti­ties can be given a right to mine by the gov­ern­ment, but this right may not ex­ceed 30 years. It is the “na­tion” (with the state as cus­to­dian) and not the min­ing com­pa­nies that have le­gal own­er­ship of the min­eral re­sources be­neath our soil.

It can­not just be a case of what lies be­neath the soil. What about all of those mas­sive min­ing cor­po­rate even non-racial strug­gle to trans­form our coun­try. It is a strug­gle that, of course, will be driven by the work­ers and poor, and by the as­pi­ra­tions and ca­pac­i­ties of the black ma­jor­ity. In other words, this is the heart of to­day’s na­tional demo­cratic strug­gle.

It is not clear how the ex­ten­sive na­tion­al­i­sa­tion of the mines would con­trib­ute at this point to the trans­for­ma­tion of our per­verted ac­cu­mu­la­tion path.

I sus­pect that Malema and oth­ers are miss­ing this big­ger pic­ture be­cause when they speak of min­eral ben­e­fi­ci­a­tion they are think­ing of bling… sorry, jew­ellery. The idea that SA will grow into a ma­jor jew­ellery pow­er­house to ri­val cen­turiesold ar­ti­sanal tra­di­tions (and mar­kets) in In­dia or Am­s­ter­dam, sim­ply be­cause some of the pre­cious min­er­als hap­pen to be mined here, is a pipedream.

Be­sides, it is not clear why na­tion­al­is­ing a di­a­mond mine will, for in­stance, nec­es­sar­ily give us a bet­ter com­pet­i­tive edge in the jew­ellery mar­ket.

Some of us have al­ready cau­tioned that na­tion­al­is­ing min­ing houses in the cur­rent global and na­tional re­ces­sion might have the un­in­tended con­se­quence of sim­ply bail­ing out in­debted pri­vate cap­i­tal, es­pe­cially BEE min­ing in­ter­ests. At the beginning of this year, the gov­ern­ment es­ti­mated that some 80 per­cent of BEE deals were “un­der the wa­ter” as a re­sult of the global re­ces­sion. BEE min­ing shares were par­tic­u­larly hard hit as a re­sult of the sharp fall in com­mod­ity prices on the world mar­ket.

Many of our gold mines in par­tic­u­lar are in­creas­ingly de­pleted and un­vi­able. Re­cently the global gold price has bounced back, but it is telling that our gold out­put ac­tu­ally dropped by some 9 per­cent in the same pe­riod. Our gold mines are sim­ply no longer able to re­spond dy­nam­i­cally to gold price rises.

The ar­gu­ment that na­tion­al­is­ing the mines might un­in­ten­tion­ally serve to bail out fail­ing cap­i­tal­ists as­sumes that na­tion­al­is­ing would in­volve sig­nif­i­cant mon­e­tary com­pen­sa­tion.

Speak­ing as a Marx­ist (not a con­sti­tu­tional lawyer), I think an ex­cel­lent case could be made that the new demo­cratic state, act­ing on be­half of the peo­ple of SA, owes the min­ing houses ab­so­lutely noth­ing. It is the min­ing cor­po­ra­tions that owe the peo­ple of SA tril­lions of rands in com­pen­sa­tion, not the other way round.

But would the Con­sti­tu­tional Court see things in this way?

The ex­ten­sive na­tion­al­i­sa­tion of the mines would land the state with the bur­den of manag­ing many min­ing sec­tors in de­cline. It would bur­den the state with the re­spon­si­bil­ity for deal­ing with the griev­ous de­struc­tion that a cen­tury of rob­ber­baron min­ing has in­flicted on our en­vi­ron­ment. Na­tion­al­is­ing would also bail out pri­vate cap­i­tal.

Ex­ten­sive state own­er­ship of the min­ing sec­tor would on its own not change any of the un­der­ly­ing sys­temic prob­lems in our broader econ­omy. And un­less it was part of a more fun­da­men­tal trans­for ma­tion of our cur­rent ac­cu­mu­la­tion path, it would also not change the semi-pe­riph­eral sta­tus of SA in the global econ­omy – it might even worsen this sta­tus. In all prob­a­bil­ity it would also re­sult in the state hav­ing to fork out bil­lions of rands in com­pen­sa­tion at a time when we have other key pri­or­i­ties that, pre­cisely, have a bet­ter chance of con­tribut­ing to a fun­da­men­tal trans­for­ma­tion of our cur­rent prob­lem­atic ac­cu­mu­la­tion tra­jec­tory.

Cronin is the deputy gen­eral sec­re­tary of the SACP. This is an edited and abridged ver­sion of an ar­ti­cle pub­lished in the SACP on­line jour­nal Um­sebenzi.

‘It is the min­ing cor­po­ra­tions that owe the peo­ple of SA tril­lions of rands in com­pen­sa­tion, not the other way round’

very con­sid­er­able min­eral ben­e­fi­ci­a­tion. Eskom turns a sig­nif­i­cant pro­por­tion of our coal pro­duc­tion into elec­tric­ity. Sa­sol’s global lead­ing-edge tech­nol­ogy ben­e­fi­ci­ates coal into oil and other petro-chem­i­cal by-prod­ucts. Sa­sol, in fact, pro­vides for some 35 per­cent of all our do­mes­tic petrol needs. Our coal into en­ergy is also fur­ther ben­e­fi­ci­ated into alu­minium at two ma­jor smelter plants. Some of our iron-ore is ben­e­fi­ci­ated into steel by ma­jor cor­po­ra­tions, in­clud­ing the for­mer Is­cor and now pri­va­tised multi­na­tional Arcelor Mit­tal. pose grave chal­lenges of sus­tain­abil­ity for us.

Once we un­pack the min­eral ben­e­fi­ci­a­tion story in this way, we start to un­cover the many sys­temic re­al­i­ties in our econ­omy that lock us into a semi-colo­nial sta­tus within the world econ­omy. It is th­ese (and other) sys­temic re­al­i­ties that con­tinue to re­pro­duce cri­sis lev­els of un­em­ploy­ment and racial in­equal­ity. And it is th­ese re­al­i­ties that need trans­for­ma­tion, and they go to the heart of the pos­si­bil­ity and ne­ces­sity of a pa­tri­otic, multi-class, demo­cratic and, yes Com­rade Malema,

BE­CAUSE Jeremy Cronin chose to write about the na­tion­al­i­sa­tion of mines in re­sponse to the ANC Youth League, we are left with no choice but to re­spond and ex­pose the re­ac­tionary un­der­tones that char­ac­terise his in­put. It is very sad that Cronin de­cided to iso­late me from the league’s 23rd Na­tional Congress res­o­lu­tion that “the State should be cus­to­dian of the peo­ple in its own­er­ship, ex­trac­tion, pro­duc­tion and trade of min­eral wealth be­neath the soil, mo­nop­oly in­dus­tries and banks”. We thought that it is only rightwing news­pa­pers and their an­a­lysts who re­cur­rently iso­late me from the or­gan­i­sa­tion, and are amazed that Cronin has joined the band.

In Au­gust, the league re­leased a na­tion­al­i­sa­tion of mines con­cep­tual frame­work to avoid the con­fu­sion and mis­in­ter­pre­ta­tions that dom­i­nate Cronin’s in­put.

We said: “Na­tion­al­i­sa­tion is not a panacea for South Africa’s de­vel­op­men­tal chal­lenges, but it should in the man­ner we are propos­ing it, en­tail democratis­ing the com­mand­ing heights of the econ­omy, to en­sure they are not just legally owned by the state, but that they are thor­oughly democra­tised and con­trolled by the peo­ple.”

In the ANC, var­i­ous ev­i­dence points to the fact that own­er­ship by the peo­ple as a whole was con­strued to mean na­tion­al­i­sa­tion.

Com­rade Jeremy de­lib­er­ately pro­vides in­com­plete in­for ma­tion about the min­er­als that are ben­e­fi­ci­ated. The min­eral wealth not ben­e­fi­ci­ated lo­cally far ex­ceeds what is. South Africa is home to vi­tal min­er­als re­serves – platinum group met­als (70 per­cent), gold (40 per­cent), man­ganese (70 per­cent), chromium (70 per­cent) and 54 other min­er­als.

What ex­actly hap­pens to th­ese min­er­als is not known, yet Cronin know­ingly avoids this ques­tion be­cause his main in­ter­est is de­fend­ing the ex­is­tent prop­erty re­la­tions.

The only thing we can do, as he sug­gests, is to trans­form the pat­tern of cap­i­tal ac­cu­mu­la­tion, not change it. We will never say that Com­rade Jeremy is re­formist be­cause the youth league would then be la­belled BEE-funded, anti-com­mu­nist, only ob­sessed with shiny ob­jects.

The state con­trol, own­er­ship and ex­pan­sion of our min­eral pro­cess­ing and ben­e­fi­ci­a­tion would play a crit­i­cal role in labour-ab­sorp­tion of many other work­ers into the South African econ­omy.

South Africa needs high labour­in­ten­sive pro­grammes to de­ci­sively deal with the un­em­ploy­ment and poverty chal­lenges. This in Com­rade Jeremy’s books is re­duced to the league’s ob­ses­sion with bling to the ex­tent that we can never think any­thing de­vel­op­men­tal, but bling.

It is sad that pre­vi­ously, those who look like us were con­sid­ered in­tel­lec­tu­ally in­fe­rior by the white su­prem­a­cists, and to­day Com­rade Jeremy re­flects the same sen­ti­ment, even be­fore he in­ter­acts with the views of the league. Min­ing, as a crit­i­cal com­po­nent of the econ­omy, should be used to ex­pand and in­dus­tri­alise the econ­omy in a more de­vel­op­men­tal, in­stead of par­a­sitic, way.

Jeremy in­stead sus­pects that we are miss­ing this big­ger sys­temic pic­ture be­cause of think­ing of “bling… sorry, jew­ellery”. Can it be pos­si­ble that we are ded­i­cat­ing our strug­gle against prej­u­dices else­where while they ex­ist within the or­gan­i­sa­tion?

Black peo­ple, and par­tic­u­larly Africans in min­ing, do not own any­thing above 10 per­cent of the min­er­als ex­trac­tion, pro­duc­tion and trade. Even those who think they own, do so on be­half of white-owned and con­trolled banks.

The si­lence on the wealth that will be trans­ferred from the white mi­nor­ity to the black and par­tic­u­larly African ma­jor­ity is very loud. It ap­pears that the only con­cern Com­rade Jeremy has is that th­ese black-in­debted share­holder cap­i­tal­ists will be saved by the call for na­tion­al­i­sa­tion and noth­ing else.

The na­tion­al­i­sa­tion that should hap­pen should never be a blindly driven pro­gramme, but cau­tious as be de­cided on a case by case ba­sis.

The Con­sti­tu­tional Court will not be in­volved in all th­ese be­cause our call for na­tion­al­i­sa­tion and its re­al­i­sa­tion will never vi­o­late the con­sti­tu­tion.

The ques­tion is whether we have the ca­pac­ity, courage and will to use po­lit­i­cal power for the ben­e­fit of the peo­ple as a whole. South Africa in 2009, more than in other pe­riod in its his­tory, is strate­gi­cally in a space and pe­riod to na­tion­alise mines.

The Com­mu­nist Party should, in this in­stance, al­ways seek to en­rich the de­bate and dis­cus­sion on the na­tion­al­i­sa­tion of mines and avoid join­ing re­ac­tionary and coun­ter­rev­o­lu­tion­ary forces who be­lieve the sta­tus quo in terms of prop­erty re­la­tions is ac­cept­able.

No amount of bick­er­ing from both Right and fake-Left forces will di­min­ish our ef­forts to en­sure that mines and other strate­gic sec­tors of the econ­omy are na­tion­alised. We also do not need the per­mis­sion of white po­lit­i­cal mes­si­ahs to think.

Malema is the pres­i­dent of the ANC Youth League. This is an edited and abridged ver­sion of his re­sponse to Cronin’s ar­ti­cle.

‘South Africa in 2009, more than in other pe­riod in its his­tory, is strate­gi­cally in a space and pe­riod to na­tion­alise mines’

it might im­pact on the gov­ern­ment fis­cus and disable gover nment’s ca­pac­ity to build bet­ter lives for all.

If in­deed gold min­ing would be more cost in­stead of ben­e­fit to South Africa, then we will not con­cen­trate our en­er­gies on it. Platinum, chrome, man­ganese, di­a­mond, coal, and most of the other 54 min­er­als con­tinue to be strate­gic min­er­als – their ex­trac­tion, pro­duc­tion and trade should ben­e­fit the peo­ple as a whole.

Na­tion­al­i­sa­tion may in­volve ex­pro­pri­a­tion with or without com­pen­sa­tion. This is vi­tal and should

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