Mine Nationalization

Topics: Jacob Zuma, African National Congress, South Africa Pages: 2 (621 words) Published: March 7, 2013
Mine Nationalization Proposals

Mine nationalization has been a topic of discussion in South Africa for the past two years. South African mines are the fifth largest in the world and produce more than 80% of the world’s platinum. Other minerals found within the country are coal, gold, and diamonds. There are many opposing views surrounding the issue, which leads one to believe South African mines will not be nationalized.

For Nationalization:
* Redistribution of wealth; private ownership results in the rich getting richer and the poor getting poorer * Greater safety for mineworkers and protection of their rights * Reduce environmental costs

* May improve efficiency of mines and lower unemployment rate Against Nationalization:
* May reduce efficiency because privately owned firms have more experience in the mining industry than the government * Potentially lose foreign investors which will increase unemployment rate * Government proposal of higher taxes, which is unfavorable to an industry that is already facing higher labor and power costs

South Africa faces the issue of whether or not to nationalize their mines. The African National Congress (ANC) must consider many key factors. First, miners desire better wages and working conditions. They want their rights to be protected and their safety to be a priority. Secondly, the large privately owned mining companies are profit-driven. They are more focused on profits than being socially responsible or ensuring the safety of their mineworkers. The ANC must also examine the effect nationalization will have on the unemployment rate. If the government can manage the mines effectively, they have the potential of increasing the efficiency of the mines and lowering the unemployment rate. However, if nationalization drives away foreign investors, which is South Africa’s mining industry’s largest source of capital, then this can result in a higher unemployment rate.

Although South Africa’s...
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