JOHANNESBRURG – South Africa’s ruling African National Congress (ANC) wants to forge an economy in which its natural resources best serve the country, says the head of the party’s task team formed to study a proposal to nationalise mines.

National needs could take precedence over mining companies’ desire to export so that the country’s coal, iron-ore and other mineral reserves benefit the continent’s biggest economy, Enoch Godongwana said in an inter- view in Johannesburg.

South Africa’s policies should be guided by the extent to which we can use our resources to achieve a number of goals, among them growth and redistribution, Godongwana said.

“Legislation that supersedes any contract you have to ensure the assets meet the country’s needs is an option,” he said. “In certain circumstances, national interest must prevail.”

Citigroup last year valued the country’s mineral resources at $2.5-trillion, the highest of any nation. Leaders of companies including AngloGold Ashanti, Africa’s biggest gold producer, and Standard Bank Group, the continent’s largest lender, have said nationalising mines will curb growth and hinder job creation in a country where one in four is unemployed.

South Africa has the world’s largest reserves of platinum, 30% of the world’s gold, and supplies coal to Indian and European power stations. Anglo American, Rio Tinto Group and BHP Billiton have assets in the country, which is also home to two of the world’s four biggest gold miners and the two largest platinum producers.

The ANC’s Youth League and the Congress of South African Trade Unions, the country’s largest labor grouping and a party ally, say that the ANC will adopt nationalisation as a policy at its national conference next year, and is only looking into the details of how best to do it. The study was agreed to after repeated demands by the youth wing, which is led by the 30-year-old Julius Malema.

“If there are some people who say we’re going to nationalise and we’re just looking at the modalities, I’d suggest that person is insulting the intelligence of ANC delegates,” said Godongwana, who opposes State control of industry. “I don’t believe we should take on managing more than we can.”

Godongwana, who is also the country’s Deputy Minister of Economic Development, cited the example of a coal mine that lies next to a State-owned power plant yet focuses on exports while the fuel needed to generate electricity is brought in from another mine, as a motivation for such a law. He also criticised the level of South African steel prices, despite the country’s abundant deposits of iron-ore.

The ANC will in November publish a report on findings by an independent task team that is examining models of nationalisation, or increased State participation in mining around the world, he said. Those findings, based on visits by the team to countries including Chile and Botswana, will be made available for public comment.

With a jobless rate of 25.7%, South Africa’s government is aiming at the 7% annual economic growth that it says it needs to create five-million jobs by 2020. The economy expanded by 1.3% in the sec- ond quarter, its slowest pace in two years, according to the Pretoria-based national statistics office.

Government companies already run a coal mine and a diamond operation while the Public Investment Corporation (PIC), which manages pension funds for State workers, and the Industrial Development Corporation hold stakes in mining companies.

Kumba Iron Ore, which owns the country’s largest iron-ore mine, is 17%-held by the two State-owned companies and coal producer Exxaro Resources, is 5.3% held by the PIC, according to data compiled by Bloomberg.

The ANC Youth League’s campaign to wrest mine ownership from what it calls a white capitalist elite has caused “an uneasiness from investors, particularly from outside South Africa”, who do not understand that the discussion is at party level rather than government level, Godongwana said. Sixty-six per cent of South African lawmakers are repre- sentatives of the ANC.

“One thing positive is that it’s introduced a sense of urgency [regarding] some of the social ills engulfing our society,” he said, referring to the Youth League’s lobbying.

South Africa’s Gini coefficient, a measure of income inequality, is 0.68, according to the South African Treasury, one of the highest in the world and higher than in 1994, when the country held its first all- race elections and ended the apartheid system of institutionalised racial discrimination. A reading of zero means complete equality, while a reading of one means complete inequality.