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UPDATE 1-INTERVIEW-SAfrica finmin: no mining move; looking at FX

Published 09/16/2010, 07:19 AM
Updated 09/16/2010, 07:24 AM
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(Updates with more Gordhan comments)

LONDON, Sept 16 (Reuters) - Nationalising South Africa's mines is not part of government policy, the country's finance minister told Reuters on Thursday, saying he does not expect any change of policy on this issue.

Minister Pravin Gordhan also told Reuters Insider in an interview that South Africa currently is using reserve building and currency swap operations to control the rand which has strengthened almost 5 percent against the dollar this year.

Powerful trade unions have led calls to tame the currency via a capital inflows tax but Gordhan said the finance ministry was studying other countries' experiences on this.

"These debates are going on. We will study all pros and cons and evaluate," he said.

"We said in February we will assist the Reserve Bank in buying reserves. At present we are using two options -- buying reserves and engaging in swaps."

South African union federation COSATU, a partner in the country's governing alliance, said on Tuesday that a non-inflationary way to build reserves would be for South Africa to accumulate gold from the mining companies, which it wants to nationalise.

Gordhan said mine nationalisation "is not government policy. Of course in a democracy you have a right to express your point of view and these issues will be debated but we don't foresee any government policy change on this issue."

The ruling African National Congress has maintained investor-friendly policies in Africa's biggest economy but rising unemployment and chronic poverty is piling pressure on the party to show its policies are worth pursuing.

(Reporting by Sujata Rao; Writing by Ruth Pitchford; Editing by Ron Askew)

(London Treasury Desk; 44 207 542 4441; ruth.pitchford@thomsonreuters.com)

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