South Africa's Quota System - Mining Quotas

By Charles Kubach, Mine-Engineer.Com
October 15, 2010

South Africa could learn a lot from the USA's quota system, mandating certain minorities be given a fixed percent of jobs, regardless of performance or abilities. It was a absolute failure, except in giving those undeserving jobs they did not deserve, and depriving those more qualified of the advancement they earned by hard work and good decision making.

The Minerals and Petroleum Resource Development Act of 2004 mandated that the natives be given a much larger stake in mining industry, particularly the top management jobs, regardless of experience or qualifications. This type of legislation is the Death Knell to any industry. It is excessive government interference, and in private enterprise that will make incentive to achieve disappear and rewards for superlative performance unrewarding and therefore will diminish the desire to do so. If this policy is followed in South Africa, its mining industry will follow many of the other government controlled industries on the continent, to corruption, inefficiency and oblivion. It will end up costing $5000 per ounce to produce gold, which will be selling for $1500/ounce. In short it is one of the most ignorant ideas to come out of South Africa in years.

Their economy is heavily dependent upon mining, and the government is hell bent on destroying the economy, much like our President and his administration (Obama) is hell bent on destroying the US economy, and they are succeeding. South Africa will succeed also, waking up one day to a massive government without any revenue to fund their other mal formed regulations and programs.

If they think any international company is going to risk billions of dollars to develop their resources under a system that is designed to fail, they are as clueless and US President Obama, and believe me, that is CLUELESS to the nth degree.

They had better come up with their own massive capital, because international corporate capital will disappear, and they will discover a fundamental rule of capitalism and business, that is if one can not make a descent return on a risky investment, one will not make the investment.

Sound taps for mining in South Africa, it will die if the government pursues this folly.

"The Sign of an intelligent person is not the realization of all they know,
but rather the realization of all they do not know."
Charles Kubach 1979

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