"The launch of state-owned mining company is renewing questions about whether South Africa has long-term plans to nationalize the lucrative industry.
President Jacob Zuma officially launches the company this weekend at a coal mine in eastern South Africa. The mining ministry says the company, known as the African Exploration Mining and Finance Corporation, will initially focus on ensuring the state-owned electricity utility has enough coal. ?What is worrying for mining investors is, where does it go from here?? said Alison Turner, a Panmure Gordon & Co. analyst.
?Is this just a small step to a much broader transfer ... to state ownership?? Mining minister Susan Shabangu and other top officials have made it clear they oppose nationalization. But Shabangu says that while nationalization is not government policy, her African National Congress party is studying its feasibility. ?Government?s commitment to free market is beyond doubt,? Shabangu told investors recently. ?But our commitment to the betterment of the society is also beyond reproach. It goes without saying that a balance has to be found between pursuing the principles of free market with taking into account the needs of the country.?
A final decision on nationalization has been put off until the party?s 2012 annual convention. In the meantime, some speculate the push to get a state-owned mining company running is an attempt to defuse support for broader nationalization."
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