By Jack Caldwell

Julius Malema has called for the nationalization of South Africa’s mines. I have warned investors to stay away from South African mines as long as Malema and his ilk are rampant. A new report on Malema and those who seek to gain control of first world mining operations also reveals much about the motivations of those who oppose mining.

The most vocal proponent of the nationalisation of South Africa’s mines, the leader of the ruling party’s youth wing, Julius Malema, is linked to a R250m mining deal that involves politically connected individuals at the expense of impoverished communities, the country’s Sunday Times reported. The company at the heart of the deal is ASA Metals, which is 60% owned by Sinosteel subsidiary Eastern Asia Metals Investment Co Ltd from China, with the rest held by Limpopo Economic Development Enterprise (Limdev) of South Africa. ASA Metals owns a chromite mine and smelter near Steelpoort on the platinum-rich Eastern Bushveld Igneous Complex. The Sunday Times said it had information showing those involved in the deal include soccer boss Irvin Khoza and Kgomotso Motlanthe, the son of deputy president Kgalema Motlanthe. Malema was also a founding director in a consortium that was registered for the bid, shortly after discussions about the broad-based black economic empowerment (BEE) deal started in 2006. He was later forced out, the Sunday Times said. But the Sunday Times said it understood he had since held several informal meetings with those involved in putting the deal together.

This report and others are confusing. It is not clear what role Julius Malema plays or what profits he stand to gain. Clearly the reports are put out by Malema’s opponents; they seek to paint a picture of a venial, greedy, dishonest, and self-motivated young communist-for-pay.

Regardless of how venial Malema truly is, it is clear that Zuma and those in power in South Africa are powerless to control him or stem his vitrioliccalls for dispossession of the mines from their shareholders. Why invest in such a tenuous & volatile situation?