S Africa's Zuma launches state-owned mining firm

JOHANNESBURG: South African President Jacob Zuma on Saturday launched a state-owned mining company in a move to ensure greater state involvement in the economically vital sector.

Zuma said the African Exploration Mining and Finance Corporation, currently a subsidiary of the Central Energy Fund, would serve as the state-run mining firm, under which all state interests in mining would be consolidated.

"The role of the state cannot merely be confined to that of a regulator. The state must actively participate in the mining industry to ensure that our national interest is protected and advanced," Zuma said during the launch, according to a copy of his speech.

"Government policy on minerals and mining does not make provision for the nationalization of mining assets, but it does not prevent the state from participating actively in mining, competing with other companies."

Radical elements within the ruling African National Congress have been pushing for nationalisation of mines, although most analysts see the establishment of a state miner as the limit of the government's involvement in the sector.

Earlier this month, Mines Minister Susan Shabangu said nationalising of mines in the world's top platinum producer and a major supplier or gold and coal was "not the option."

At that same time the head of mining giant Anglo American told the guardians of the world's fifth biggest mining economy not to heed the "false prophets" of nationalisation who are "advocating the road to ruin."

AEMFC's current portfolio includes coal, uranium and limestone. The government has said it wanted the state-owned firm to focus on strategic minerals such as coal and uranium to ensure sufficient supplies to its power plants.

South Africa relies on coal for 95 percent of its power supplies and is home to Africa's only nuclear energy plant.

The state-owned company's first project will be the Vlakfontein coal mine in South Africa's Mpumalanga province, which will supply coal to power utility Eskom over 15 years, with an initial production of around 840,000 tonnes per year.