It is vital for the state to step up and take a bigger stake in the mining industry, independent researcher and advisor Duma Qgubule said on Friday.

Backing greater state involvement in the sector, Qgubule said he simply did not understand what all the fuss over government's involvement in the sector was about.

“I find it disturbing that many in the private sector don't want to have this debate,” Qgubule told those attending a Mining for Change seminar organised by AngloGold Ashanti and Motjoli Resources.

Research conducted by Qgubule at KIO Advisory Services shows that black representation in mine ownership among the leading 25 JSE-listed mining companies is less than 5%.

This is in stark contrast to JSE's own research which showed that black ownership of the local bourse was closer to 17%.

Trevor Chandler of Chandler & Associates, who headed the research team appointed by the JSE, said in total, black South Africans hold at least 17% of the Top 100 Companies listed on the JSE and that this was likely to be understated since 32% of the shares still had to be assessed.

The 17% comprised directly held ownership amounting to 8%, mostly through empowerment stakes, and 9% held through mandated investments, such as pension funds and unit trusts.

Either way the research shows that listed companies have a long way to go before they meet the targeted 25% required in terms of the Broad-Based Black Economic Empowerment Codes.

However, Qgubule said the issue of black ownership was peripheral given the debates raging in the country.

But he said the mining industry's failure to transform was fuelling these debates.

This would be particularly true in the case of nationalisation.

Qgubule noted that there were very few employment share ownership schemes in the mining industry and these were just as important in the BEE mix.

“I believe in multiplicity of ownership,” he said. This would then include black investors, company employees, the community and state ownership.

While the issue of affordability has been raised in the discussions over government taking stakes in mining companies and in the nationalistaion debate, Qgubule shrugged this off.

He said government “would never” buy every mine in one year but would take larger stakes in mining companies over time. “This would mean affordability was no longer an issue,” he said.

source:business report