LEAD: South Africa to look for new mining opportunities

Feb 7, 2012, 12:41 GMT

Johannesburg - South Africa will be looking for new sources of minerals to mine, in order to create jobs and bring in investment, Mineral Resources Minister Susan Shabangu said Tuesday.

'There is significant potential for the discovery of other world-class deposits in areas that are yet to be thoroughly explored,' Shabangu told a mining conference in Cape Town, according to the SAPA news agency.

'(The) government is now embarking on an effort to support exploration,' she said, adding that the Treasury had allocated funds for research over the next three years.

Nationalizing the country's mines 'is not a viable policy,' she said, adding that she remained opposed to the idea.

South Africa has uniquely high reserves of gold, manganese and platinum. The mining sector has been identified repeatedly by ministers as an area with the potential to produce job growth.

Unemployment is close to 26 per cent, and the youth jobless rate is higher.

Members of the ruling party and others have called for the government to take ownership over certain sectors of production, to deal with poverty and wealth gaps between racial groups.

Trevor Manuel, a top cabinet member and aide to President Jacob Zuma on economic planning, dismissed the notion this week, saying 'we can't take the idea of nationalization forward.'

He told the conference that the mining sector needed 'policy certainty,' implying that continued lack of clarity from the government over which direction it will take would hurt the economy.

However, Gwede Mantashe, the secretary general of the ruling African National Congress (ANC), called on investors to stop threatening to withdraw capital from the country if the nationalization debate continues.

'I don't think we should use the blackmail approach in discussing an important policy matter,' Mantashe said in Johannesburg, noting that many booming Asian and African countries had state-owned companies in key sectors.

The ANC is due to release a policy paper on mining and nationalization in the coming weeks.

The paper is expected to float new ideas for so-called 'partnership' plans with the private sector and revised tax schemes, so the state can better profit from the industry. But Shabangu confirmed the report will not favour nationalization.

Investors are looking to see if Zuma too rejects nationalization in his upcoming annual State of the Nation address to parliament on Thursday.