The Youth League has a big list of objectives that it says can only be achieved by majority state control of every mining enterprise in the country. It wants to improve the working conditions of miners, it wants to create more of those mining jobs, and it wants to fund the Treasury. And investors who don’t like it can go hang. That’s what China is for.

“If there is any investor that is going to leave here and think we are in crisis, other investors will come,” said League leader Julius Malema. “China will never be scared of nationalisation. Investors must be aware of our strong communist friend called China.”

The plan is now to canvas its own branches, speak to the likes of mining unions and the Chamber of Mines, integrate what they have to say, and then push the issue at the 2012 ANC national conference. It anticipates law will follow shortly thereafter, and then it can move on to the banks. Because the League is more firm than ever in its belief that it is the keeper of the ANC Freedom Charter, and has to pull the party back to the socialism demanded by it.

In its newly-minted discussion document, the Youth League says it wants new mining licences to be predicated on a joint venture with a single, state-owned enterprise responsible for all mining in the country. It envisages that company to handle everything from extraction to beneficiation. Existing mining operations will be required to enter into the same agreement as soon as their existing licences expire, and the minimum state equity will be 60%.

That is a process that the ANC proper will find hard to fault, and certainly can’t reject outright without alienating the left. It is a simple continuation of the nationalisation of natural resources that was rapidly implemented after 1994. As Malema puts it, “we come with the minerals, you come with the financial capital.”

If the state stake were a passive one, mining companies would probably have been happy to negotiate on the percentage. Mineral royalties that come from the top line are considerably tougher than a share of profits that come from the bottom line, especially when the market turns against you. The Youth League, however, sees the new state behemoth as the very model of an activist shareholder. That is unlikely to go down quite as well.

By Phillip de Wet