Nationalising South African mines: Back to a prosperous future, or down a rabbit hole?
Stellenbosch Working Paper Series No. WP17/2011Publication date: 2011
Author(s):
Nationalisation is high on the policy agenda in South Africa. This paper considers the case for nationalising the local mining sector from an evidence-based perspective. The relevant evidence is derived from theoretical considerations and related to the known features of the South African mining sector and economy. A strong case against nationalisation emerges, which can be summarised as follows: The mining sector is competitive and therefore a poor candidate for public ownership. Further, the resources sector does not dominate the South African economy nor does it create the risk of Dutch Disease. Nationalising the mining sector will cost the government more than it receives. This is not only a bad idea in itself, but it will limit the scope for distributive policies on the national budget. The contemporary international experience demonstrates the risks of fiscal imprudence. Finally, nationalising the resources sector will undermine support for those very market-based institutions required to achieve a higher long-run growth trajectory.
JEL Classification:L22, L52, L71
Keywords:Nationalisation, South Africa, mining sector
Download: PDF (349 KB)Login
(for staff & registered students)
Upcoming Seminars
Monday 28 July 202512:00-13:00
Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
Topic: "TBC"
12:00-13:00
Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
12:00-13:00
Professor Johan Fourie: Stellenbosch University
Topic: "Economic History: TBC"
BER Weekly
18 Jul 2025 Encouraging data, but messy politics while US tariff deadline loomsThe big global data prints of the week came on Tuesday, with better-than-expected Chinese GDP growth for Q2 and US core CPI coming in lower than expected, but still (finally) reflecting some signs of tariffs being passed on to consumers. Locally, the uptick in mining production and retail sales was positive for Q2 GDP dynamics. In addition to the data,...
Read the full issue
Upcoming Seminars
Monday 28 July 202512:00-13:00
Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
Topic: "TBC"
12:00-13:00
Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
12:00-13:00
Professor Johan Fourie: Stellenbosch University
Topic: "Economic History: TBC"
BER Weekly
18 Jul 2025 Encouraging data, but messy politics while US tariff deadline loomsThe big global data prints of the week came on Tuesday, with better-than-expected Chinese GDP growth for Q2 and US core CPI coming in lower than expected, but still (finally) reflecting some signs of tariffs being passed on to consumers. Locally, the uptick in mining production and retail sales was positive for Q2 GDP dynamics. In addition to the data,...
Read the full issue