20110629
Reuters
JOHANNESBURG (Reuters) - The debate about nationalisation of South Africa's mines could hit companies' ability to raise capital for sustaining or growing output, the Business Day reported on Wednesday.

Citing David Brown, the chief executive of Impala Platinum, the world's second-largest producer of the precious metal, the paper said miners' inability to meet economic empowerment targets may be the reason behind the calls for greater state control in the key industry.

South Africa is the world's largest producer of platinum and ferrochrome and a major supplier of gold and iron ore.

"Vast amounts of capital are needed just to stand still, let alone grow. Therefore, if we start impacting on that flow of investment then we will see some significant issues around mining output from South Africa," Brown was quoted as saying.

Brown's words were echoed by Sandile Nogxina, the outgoing director general at the minerals ministry who said that slow progress in raising black ownership in mining and putting social and labour plans in place had brought the nationalisation debate upon the industry.

Nogxina said there was a possible solution that could avoid outright nationalisation of mines, but declined to give details, the paper said.

A review of the mining charter published last year showed that whites still dominated the industry and changes were slow despite a decade of affirmative action.

By 2009, only 9 percent of mines were owned by blacks, well below a target of 15 percent. The 2014 target is for 26 percent black ownership in mining, although many in the government doubt this will be achieved.