Another state-owned enterprise….

03 Apr

Is this the platform towards the achievement of the ambitious 5 million job creation project by the president of the Republic of South Africa, MR Jacob Gedleyihlekisa Zuma? In this blog post Dumisani Mahlangu looks at the new state-owned enterprise.

Over the past few years, we have seen the birth of numerous parastatals. Parastatals are state-owned enterprise (SOE). Not so long ago we have seen the birth of the new state enterprise in the telecommunication sector. Broadband Infraco is the new government business venture. Whether this venture will not be threatening to Telkom is yet to be seen. Let Broadband Infraco be the topic for another day.

Shhhhhhhhhhhhh, South Africans, business analysts and yes you, there is apparently a new state-owned enterprise in the mining sector.

At the beginning of March the honourable president of the Republic turned the sod at Vlakfontein mine, South of Johannesburg. There is of course more government interference in the mining sector; from the much heated debate of nationalisation to all the laws regulated by the ministry of mineral resources.

The African Exploration Mining & Finance Corporation (AEMFC) is the first state-owned enterprise in the mining sector. At the launch of the venture, the honourable president said that “….the state must actively participate in the mining industry to ensure that our national interest is protected and advanced”.

Almost four week after the business launch I am still pondering which national interest are being “protected” and “advanced” more especially in the mining sector. Can the establishment of such a business venture be a catalyst to the much debated topic of nationalisation? The answer to that question is yet to be answered. On a second thought, a more positive thought for that matter, this venture will to a great extent help in reaching that ambitious target mentioned earlier.

The background of AEMFC

AEMFC is a state-owned enterprise with (at the time of writing this article) has 27 prospecting mining rights granted by the state, and the company is still gunning for more for the platinum group metals and the base metals. The capital has been granted by the Central Energy Fund, another state-owned enterprise.

Life span, human capital and the prospect of the enterprise

The Vlakfontein coal mine apparently has 15 year life-of-a-mine and cost around R130 million.

The venture is headed by Sizwe Madondo, and he is supported by close to 200 employees. Oh, yes 200 less unemployed people.

The prospect of the venture looks promising indeed. According to the company CEO Sizwe Madondo, the venture hope to produce 10000 bbl to 15000 bbld a day of synthetic crude oil from the third quarter of 2013 and at least employing 1000 people.

Consider investing in AEMFC because it envisages being a top-five coal producer by 2020.

As I always say to my buddies that new creations yield new hopes, I am very optimistic that this venture will be a profitable one, with sound management practices, unlike some SOE’s I can’t mention here.


Patrice Motsepe, (2011, 4-11 March). Rather problematic. Mining Weekly, p.7.


Posted by on April 3, 2011 in Business



5 responses to “Another state-owned enterprise….

  1. Es Said So

    April 3, 2011 at 6:52 pm

    This is very interesting, you know. Our government is pouring many billions of Rand into the mining sector, which is sadly one industry that is not very labour intensive, instead of investing in improving our manufacturing abilities for example. That five million employed target will surely not be met at this rate

    • Dumi-rocks

      April 7, 2011 at 10:12 pm

      Apparently is a 2020 goal, we will see how that unfolds. Don’t you think that this is a first step to nationalisation?

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    April 10, 2011 at 7:02 am

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