South Africa's ANC Plans State Mining Firm

South Africa's ruling ANC plans to set up a state mining firm after next week's election, but nationalising mineral assets is not on the agenda, a top official of the African National Congress said.
Led by presidential frontrunner Jacob Zuma, the ANC is expected to retain its dominance in the 22 April general election with a promise to do more for the poor in the major metals producer but also to maintain business-friendly policies.
ANC Secretary General Gwede Mantashe, a former mine workers leader who also chairs the ANC's Communist Party ally, said a state mining firm would create jobs and help Africa's biggest economy benefit more from its mineral wealth.
"Having a state mining company is distinct from nationalisation. It will compete with other companies in mining," he told Reuters, adding it would also renew a focus on local processing.
"To sell gold or iron ore in raw form undermines our mining industry. We sell less value like raw iron ore and buy products such as steel at a higher cost."
But signs of greater state involvement in the sector, which accounts for 7% of gross domestic product and nearly half a million jobs, could raise concerns among investors wary of any shift to the left under Zuma.
Mantashe said the new firm might focus on strategic minerals such as coal, uranium or platinum, and operate in a similar manner to state-owned PetroSA, which competes with private oil firms, particularly in exploration.
The mining sector is subject to intense scrutiny by big foreign groups such as Anglo American, South Africa's biggest mining player, which want the sector handled carefully.
The global economic slowdown has already knocked metals prices and put thousands of jobs on the line.
Doubts
Paul Walker, chief executive of London-based metals consultancy GFMS, said state involvement was a bad idea.