Mine nationalisation was not only a “bad idea”, but big business in South African argued on Tuesday that the manner in which debate was currently being conducted was eroding policy certainty, business confidence and resulting in a deferment of investment not only in the mining sector, but across the South African business landscape.

Business Leadership South Africa (BLSA) chairperson Bobby Godsell said that the body – an association of the largest 85 listed, multinational and State-owned enterprises operating in the country – was willing to engage in a “robust” debate on the merits of the proposed policy, which had been placed on the agenda by the African National Congress Youth League (ANCYL).

“We have to enter this debate as South Africans, as this debate cannot be monopolised by a single organisation.”

Furthermore, CEO Michael Spicer also called for a “responsible” and “non-polemical” discussion and critique, warning that the current rhetoric carried serious consequences for investment decisions and jobs.

BLSA would not be drawn on what it felt about the current handling of the debate by the governing ANC and the government, but Spicer did say that the government could not “pretend that this can just carry on for another 18 months in a way that has no impact on the size of the economy, the size of employment and the investment decisions that both local and international investors make”.

Earlier Business Unity South Africa warned that the tone of the public discourse on the nationalisation of land, banks and the mining industry was “weakening” South Africa’s ability to attract direct investment and it called for greater government and business leadership to restore certainty “as quickly as possible”.

However, ANCYL president Julius Malema said last week that there was “greater consensus” in the ANC on the nationalisation of mines and other strategic sectors of the economy. He also called for “radical policy changes”, including nationalisation and land expropriation.

Government and the ANC both continued to stress that nationalisation was not policy.

But the ANC had also established a “research project” to examine “Forms of State Intervention in the Economy”, including mine nationalisation. The study was expected to be finalised during the second half of 2011.

In the meantime, the debate is being dominated by the ANCYL, which was using the debate to galvanise support around key succession battles ahead of the ANC’s 2012 National Conference.

However, against the backdrop of recent uncertainty around the security of mineral rights, the nationalisation debate had raised anxiety levels among domestic and international mining groups operating in South Africa.

High-profile mining lawyer Peter Leon even warned recently that the R52-billion wiped off the JSE in 72 hours after the Mining Charter was leaked in 2002 would look like a “storm in a teacup” compared with the adoption of a full-blown nationalisation policy.

Godsell added that the “cost of these kinds of policy proposals, which we think have not been well thought out, is very high”.

“It’s going to defer investment, it’s going to defer growth. So, we think it’s a bad idea, emphatically.”

He sympathised with the league’s frustrations over sustained high levels of poverty, joblessness, particularly among the youth, inequality and economic exclusion. But remained “hugely unconvinced” that nationalisation of the country’s major globally competitive industry would help solve the problems.

BLSA would, together with other business organisations, including the Chamber of Mines, which was conducting empirical research into mine nationalisation experiences elsewhere, seek to enter the debate in a “responsible way” by placing detailed information and arguments into the public domain.

In particularly it would seek to interrogate the five perceived benefits of nationalisation outlined in a recent ANCYL discussion document on economic transformation, which argues that a transfer of ownership would lead to more taxes and jobs, better wages, better spatial development and greater political and economic sovereignty.

“Our view is that in none of those five areas is there a compelling argument for nationalising the industry. Indeed, any detailed analysis would show that there is likely to be less total take for the State,” Godsell said, noting that in 2010 the mining industry invested more than it extracted in earnings.

He also noted that many of the shares in South Africa’s mining companies were owned by “people who have pension funds” in South Africa and globally. “So why do you would want to turn your back on that source of investment for the mining industry?”

BLSA also questioned what more would be achieved through ownership, than through government “regulating the mines, or setting wages through collective bargaining, or managing transformation through a Mining Charter”.

“But we need to show that and we owe it to the country to do that. Even more so we need to say that there are better ways of address youth unemployment.”