By John Galt
June 29, 2011
While the Euro turns, the miners might be getting ready for Communist burns. The South African business newspaper, Business Day, has started a special in-depth series on the threat by the African National Congress (ANC) to nationalize the mining industry in that country due to inequalities of ownership and benefits to the citizens as a whole. This is the typical communist clap-trap when profits are strong and the economy begins to falter because of mismanagement by political parties who do not believe in freedom or capitalism.
The big statistic which is sticking in the craw of the Marxists is that only 9% of control of the mining industry is held by the nation’s blacks versus the “planned” target of 15% by this time. As many warned decades ago, the seizure of the Republic of South Africa by the Marxist controlled ANC would eventually lead to economic ruin despite the flourishing mining and agricultural industries as their plans for a command-control economy and managing resources would eventually trigger capital flight and reduced investment in that nation.
To quote the ANC’s own Director General of the Department of Mineral Resources from the article in Business Day:
The SA mining industry has brought the nationalisation debate upon itself by not doing enough to bring in black shareholders and be more active on social and labour plans, said Sandile Nogxina, the outgoing director general of the Department of Mineral Resources.
This is the typical strategy of communists throughout history and at the moment the ANC is playing down this threat but the markets and investors are deeply concerned it could be quite real. While there have been no decisive moves by the ruling party to begin seizure of the mines, if such an action were to occur the disruption to diamond, gold, silver, copper, platinum and numerous other strategic minerals would be immediate and create massive price distortions in the market. The good news is that it would require a change to the South African constitution for such an action to occur.
The bad news is that according to Marxists, the constitution is just a piece of paper that can be changed or ignored at will. As it seems to be happening in the U.S. as well as South Africa.