Should we nationalise the mines?
The SACP deputy general secretary and the ANC Youth League president beg to differ
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