JOHANNESBURG (miningweekly.com) – South African Communist Party (SACP) deputy general-secretary Jeremy Cronin has described provisions on minerals beneficiation in the country's Mineral and Petroleum Resources Development Act as "weak", but has also suggested that a legislative amendment might be a more "effective" and "affordable" remedy than nationalisation.

In a response to the African National Congress Youth League's framework document on the nationalisation of mines, Cronin (whose critique was described as "racist" by the league's president Julius Malema) agreed that the continued exportation of largely unprocessed minerals was reproducing "our semicolonial economic status" and costing South Africa "many potential jobs".

He lamented the fact that the 2002 Act had not made downstream beneficiation a mandatory requirement for securing a 30-year mining licence.

"We now have a sad irony. The Chinese, for instance, are willing and keen to invest in manganese beneficiation manufacturing plants here in South Africa. But this possibility is compromised by the fact that many of our manganese deposits have been leased out for 30 years to the same old established mining conglomerates and their new "patriotic" bourgeois hangers-on," Cronin wrote.

The domestic manganese sector is dominated by Samancor Manganese, owned by BHP Billiton and Anglo American, as well as Assmang, whose shareholders include African Rainbow Minerals and Assore. South Africa's Kalahari basin is also host to some 80% of the world's manganese resources, and is beginning to attracting interest from companies in Australia, Europe and Asia.

There is increasing concern, though, that South Africa's power constraints and rising electricity tariff will further undermine the competitiveness of South Africa as an investment destination for substantial minerals beneficiation, with Rio Tinto Alcan having recently pull the plug on a proposed $2,7-billion aluminium smelter project, in the Eastern Cape.

In fact, the economist at the State-owned Industrial Development Corporation, Lumkile Mondi, said recently that South Africa could no longer use low-cost energy as "an instrument" for attracting investment into minerals beneficiation projects. The IDC is a major coinvestor in a range of projects that add value to mineral resources.

Speaking in late October, Mondi said that the future of minerals beneficiation was uncertain, unless a new electricity-supply model emerged, where the private sector engaged in cogeneration and new non-Eskom capacity was developed.

Meanwhile, Cronin questioned whether a legislative amendment to the Act would not be more effective in leveraging "developmental beneficiation" than State ownership and control.

"There are many other job-creating, downstream possibilities where the use of democratic State power to leverage transformation out of the mining sector should be considered," he added, referring specifically to the possibility of creating South African enterprises capable of transporting seaborne commodities to export destinations.

"More than 90% by volume of all of our exports (mostly minerals) are by sea. Yet all of the shipping involved is foreign-owned, the crews are overwhelmingly non-South African, and the shipping lines pay taxes in other countries," Cronin, who is also Deputy Transport Minister, said, lamenting the fact that the country's once relatively significant maritime sector had been whittled down to a single registered ship.