A state-owned South African mining company likely to focus on coal and uranium will be up and running by the end of February, but much of its work will be farmed out to private firms, a senior official said on Tuesday.

People think that they will see public servants drilling, but we have contracted mining firms in South Africa to do that, Sandile Nogxina, director general of the mining department, told Reuters on the sidelines of a mining conference in Cape Town.

We want it to compete like any other company.

The firm will operate a coal mine in the northeast province of Mpumalanga and eventually hold stakes in other companies, he added.

Radical elements within the ruling African National Congress have been pushing for nationalisation of the mines, although most analysts see the establishment of a state miner as the limit of its involvement in the sector.

The state company could also help the government ensure sufficient supplies of coal are used to power Africa's biggest economy amid concerns that private coal mining firms are more interested in exports.

Nogxina said the government also was looking at ways to declare coal, which provides 95 percent of the energy for South African power stations, a strategic mineral.

We may in the fullness of time consider it a strategic mineral because it drives the economy in South Africa, he said. We are working on a policy on the declaration of strategic minerals.

He added that the government would leave it up to the industry and to power utility Eskom to agree on a deal that would ensure sufficient supplies to the utility, but the state would step in should Eskom declare a coal supply

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