Nationalisaiton of Mines

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NAME: MMATHAPELO MOHAMED

STUDENT NO.:

COURSE CODE: ECNM 311

TASK: ASSIGNMENT 1

DUE DATE: 16 MARCH 2011

TOPIC: NATIONALISING OF MININGSECTOR IN SOUTH AFRICA.

INTRODUCTION

WHAT IS NATIONALISATION

Nationalization is the act of transferring ownership from the private sector to the public sector. Deprivatization often occurs when a government attempts to maintain the stability of its critical infrastructure during periods of economic distress. This can occur in various segments of the economy. Deprivatization generally occurs in the areas of transportation, electricity generation, natural gas, water supply and healthcare because governments want to ensure these sectors are functioning properly so that the country can continue to run smoothly. In addition, electrical, natural gas and hydro companies tend to be monopolies, and governments will often want to have control in these areas to ensure that consumers have access to these essential services at a reasonable cost.
NATIONALISATION IN SOUTH AFRICA
According to the minister of finance Mr Pravin Gordhan stated on the March 14, 2011 that nationalisation of South Africa's mines and other economic assets is not government policy. This statement was aimed at reassuring investors. He further on said failure to be clear on policies could be a barrier to higher levels of foreign direct investment that are needed to help lift growth rates to 7 percent a year and that instead of attracting higher levels of longer-term investment, South Africa has been a destination of undesirable "hot capital flows" that has led to some economic imbalances.

NATIONALISING MINING SECTORS IN SOUTH AFRICA

WHERE IT ALL BEGAN

At the beginning of February 2010 the ANC Youth League leader Julius Maleme said that the ANCYL committee had a detailed perspective on the nationalization of the mines and went on to call on government to amend the Minerals Act to include a clause that would compel all mining...