Nationalisation of Mines in South Africa

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30 September
Word Count: 2500
Kopano Seopela

SA Economy: Nationalising South Africa’s Mining Sector

Kopano Seopela
Period 3 (09.25)

SA Economy: Nationalising South Africa’s Mining Sector

Economics 314
30 September 2011


The purpose of the essay sets out to look at the concept of nationalisation, research it and discuss whether it is an applicable strategy to implement into South African policy. The importance of the essay is to highlight the future economic outcomes which could incur in South Africa should it be adopted and also look at possible alternative strategies instead of nationalisation. The issue was addressed by making use of lecture notes, unpublished speech addressed, e-journals, online content, textbooks and economic literature. Conclusions drawn from this essay is that nationalisation is a concept which it’s costs exceed the benefits and with South Africa’s current capabilities, it is not ideal to implement – however a partnership with mining companies and the State could alleviate some of the problems South Africa has.


1. I know that plagiarism means taking and using the ideas, writings, works or inventions of another as if they were one’s own. I know that plagiarism not only includes verbatim copying, but also the extensive use of another person’s ideas without proper acknowledgement (which includes the proper use of quotation marks). I know that plagiarism covers this sort of use of material found in textual sources and from the Internet.

2. I acknowledge and understand that plagiarism is wrong.

3. I understand that my research must be accurately referenced. I have followed the rules and conventions concerning referencing, citation and the use of quotations as set out in the Departmental Guide.

4. This assignment is my own work, or my group’s own unique group assignment. I acknowledge that copying someone else’s assignment, or part of it, is wrong, and that submitting identical work to others constitutes a form of plagiarism.

5. I have not allowed, nor will I in the future allow, anyone to copy my work with the intention of passing it off as their own work.

Signed …………………………………. Date …………………………………….

Table of Contents
What Is Nationalisation?5
Why Is Nationalisation Needed?6
Advantages of Nationalisation6
Disadvantages (Costs) of Nationalisation7
Foreign Investor Disadvantages7
Environmental Disadvantages7
Investing In Nationalisation With Compensation8
Depleting Commodity Disadvantage8
International Experience of Nationalisation9
Is Nationalisation Applicable To South Africa Today?10

Since the abolishment of Apartheid, South Africa has graciously re-entered into the global economic community as an emerging economy. When compared to Sub-Saharan African countries, South Africa boasts an incredibly strong economy with plenty of room for improvement. With its resources, South African state officials have considered Nationalisation as a possible solution to alleviate these problems. This has raised much concern about it’s feasibility and has brought attention to this essay which shall form part of the national debate on the import issue, using international experience, theoretical and empirical research. What Is Nationalisation?

Nationalisation is the process of government undertaking state ownership of a business and running it itself. Gillespie states, “If governments want to completely control a business rather than trying to influence its behaviour via legislation, taxes and subsidies then it should nationalize it (2007: 110).” Pape (2000: 22) adds further support to the definition by suggesting that nationalisation leads to government or state ownership of entities within the country. However Mohr, Fourie and associates (2008: 352) state that...
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