The mine nationalisation debate is on. Mining is in crisis, and mining dependent economies such as the South African economy are scraping the bottom of the barrel literally. The crisis is the consequences of the appalling management of the global economy by our neo-liberal masters in general, and those who own Africa’s mining companies in particular.
There is an overproduction/over-supply of minerals on global markets. This oversupply is not because of poor worjer productivity. If workers were not productive there would not be an oversupply. The oversupply is the consequences of over productivity. It is also the consequence of the failure of African governments in general and the South African government in particular to take control of the mining industry.
Thus minerals were sold by mining corporations to themselves in tax havens like Switzerland at below market value, and then resold at market value to avoid paying living wages and tax in South Africa. Not only did the government not prevent this they were in fact complicit in it given than numerous senior politicians also enriched themselves in the process.
Hoarding mountains of platinum and gold in Switzerland is also a labour control mechanism with which to weaken trade unions and to break strikes in South Africa. Thus when workers strike supply to the global markets continue uninterrupted from these offshore hoards of minerals. South Africa has two choices, if we have a government of the people for the people, and not a government of corporations for corporations.
Choice 1 would be to nationalise the mines. Mineral prices would shoot up given that the “markets” would consider this a threat to global supply, the increases would not be immediate, given the hoards in Switzerland.
Choice 2, South Africa could set up a centralised buying agency which would force all mining companies operating in the country to sell all minerals mined to the government, thus cutting out the tax haven sales, and give us more control of what and how much is mined.
The government can then sell forward onto global markets. Thus, when there is a boom, the government could buy at slightly below global market value and build up a fund that would support mining in downturns. When the mineral prices are low the government could buy at above global market prices. This would cushion the industry and protect jobs.
Instead our government responds by relaxing controls over the industry making plunder even easier, which simply facilitates the overproduction of our minerals thereby further suppressing global prices and the industrialised North laughs all the way to the bank as the input costs of their manufacturing sector falls dramatically, raising their profit margins magnificently. And when the minerals are finished we will be left with the externalised environmental and social costs as they abandon us.