China showing strong interest in SA mines - SA mines minister

South Africa's mines minister, Susan Shabangu, also reiterated to investors that there are no plans to nationalize the country's mines.

JOHANNESBURG/NEW YORK (Reuters) - 

South Africa's mines minister said on Wednesday that China had shown strong interest in investing in the African country's mining sector, and reassured investors there were no plans to nationalize mines.

China, Africa's biggest emerging market partner, has been investing in the continent's mining and energy sectors, and the minister said South Africa was a willing but cautious partner.

"There is a lot of interest from China. They are interested in manganese, platinum, uranium and I would say almost every commodity," Mineral Resources Minister Susan Shabangu told the Reuters Global Mining and Steel Summit in New York.

"But we are also cautious to see if their investment is going to benefit South Africa. It is critical for us to ensure our own interest is catered for."

Shabangu said the Chinese were keen to invest in the processing of minerals in the country -- a key priority of South Africa's government, which hopes to extract as much value from its mines as possible and boost job creation.

Shabangu, who has been on a road show in North America, said investor appetite for South Africa's mining sector, one of the country's major employers, was high, and she was keen to attract just as many investors as in mining peers Australia and Canada.

Investors had expressed concerns to her about talk of nationalizing mines in South Africa, power shortages and regulatory hurdles and delays in acquiring mining rights.

Shabangu said nationalisation of mines in South Africa, the world's biggest producer of platinum and a major gold producer, was not government policy and would not happen, but rather it was a debate being pushed by a minority.

"The mining sector as a whole is confident we're not going that route. We can't afford to take a wrong direction that's not going to improve the quality of lives of our people."

Shabangu said that rather than grabbing mines, the country would run a state-owned firm focused on strategic minerals such as coal and uranium, which were required for power generation.

She said by mid-April she would complete the consolidation of the assets under one company.

MINING RIGHTS DELAYED

Asked how the South African rand is affecting the mining industry, Shabangu told Reuters: "The rand is very strong. It is a concern."

She added that its impact would have to be addressed within the fiscal framework to ensure a balanced approach.

A strong rand has been eating into company profits.

Even so, a key concern for investors was the issuing of mining rights by the state.

She said mining rights would now be issued in six months instead of more than two or three years as in the past. Prospecting rights would be issued in three months, she added.

South Africa had sufficient power this year, including during the soccer World Cup, and the blackouts that crippled the mining industry in early 2008 would not be repeated this year.

She said investors worried more about the availability of power, rather than electricity price hikes.

"What they are concerned about is, can we supply them with power? I'm confident there will be enough power," she said.

Shabangu said she would hold a summit with mining sector players to carry out the first major review of the country's Mining Charter -- an agreement requiring mining companies to sell a portion of their ownership to black people, in a bid to reverse decades of exclusion under white apartheid rule.

"We have not achieved much. It's a big lesson, we have to learn from that. The principle of the charter was to try to de-racialize the mining industry, which has not been achieved."

(Additional reporting by Ellis Mnyandu, Dana Ford, Cameron French in New York; Writing by James Macharia; Editing by Keiron Henderson and Richard Chang)

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