Chairperson, hon Minister, Deputy Minister and members, in the same Budget Vote last year, I said the mining industry contributed US$21 billion or 7% to the South African gross domestic product, GDP; with the recession it has shrunk by 32%. Now the direct contribution is down to about 5%.
The two main functions of the Department of Mineral Resources, DMR, are to create a conducive and enabling environment for investment and a stable regulatory environment to secure investments in South Africa.
According to The Economist, South Africa is not one of the seven African countries forecast to be among the 10 fastest growing economies in the next five years. There are, however, countries such as Nigeria, Ethiopia and Mozambique which will be amongst those 10 countries.
The continent is on the brink of a take-off - just like China was 30 years ago - but South Africa is not part of this growth opportunity. What role does the Department of Mineral Resources play in the economic growth potential in Africa or the national growth plan?
Foreign investment is required to create jobs, but there is a bug in the strategy and that is the continual call for nationalisation. In fact, a task team has been appointed to investigate nationalisation. The Minister keeps saying that there is no policy on nationalisation. Yet, there are crazy statements being made and this adversely affects foreign investment and job creation.
I wish to remind the Minister of the demise of the state-owned mine, Alexkor. The company reported a net profit of R36 million in the 2010 financial year, compared to a loss of R65,7 million in the 2009 financial year. However, the net profit was primarily due to a positive adjustment in the postretirement medical aid liability amounting to R45,1 million.
Now a newly created state mining company, the African Exploration Mining and Finance Corporation, AEMF, is being funded from public funds and these funds will be at risk. The state's track record is extremely poor in running mining and other state-owned enterprises, SOEs. The department indicated that the AEMF is to secure uranium and coal for energy security, but why can't the private sector do this?
The other day at a Joint Sitting in Parliament when we were being addressed by a Chinese leader, it was clear that the Chinese state-owned entities are all listed on the Chinese Stock Exchange or the international markets. We must follow the other Brics countries, namely Brazil, Russia, India and China, and list the state mining companies on the Johannesburg Stock Exchange.
Once the state mining companies are independent of the state, only then can the Department of Mineral Resources fulfil its function as a regulatory body without bias. The state cannot be the player and the referee. Perhaps one must be careful when using the word "bias" because if one looks at the court cases one cannot but wonder if the department is acting independently as a regulatory body.
We recall the court action between Kumba and Imperial Crown Trading with Duduzane Zuma; John Block of SA Salt with a forged 'n mining licence versus Saamwerk; Khulubuse Zuma and his fellow Aurora directors, Michael Hulley and Zondwa Mandela, who were booted out of the Grootvlei and Orkney mines, last week, which they got in the.. [Interjections.]