Political economist Moeletsi Mbeki believes mining houses in South Africa should be relieved of providing housing to their labour force.

"The housing of mine workers must become the responsibility of the municipalities where the mines are located, in partnership with private formal sector property developers," he said in a speech prepared for delivery at the South African Institute of International Affairs in East London on Wednesday.

Mbeki said provincial governments should stipulate the minimum standards and quality of town planning.

This would be an improvement on the African National Congress government's RDP housing standards.

"This model should also be extended to housing for farm workers."

Mbeki also said South Africa had to use its mining sector to drive an industrial revolution "rather than a consumption revolution that it has been doing for the last 100 years".

To do this, plant and equipment used in mining had to be locally produced.

"As a first step, the South African government must freeze the issuing of new mining licenses until the mining industry can demonstrate that at least 75% of the plant and equipment it is using is made in South Africa."

Mbeki said there were other costs which were impeding the growth of the mining sector: transport, electricity and taxes.

"The harebrain notion that the mining industry, through royalty taxes,... must fund the bloated and already fattened state bureaucracy belongs to the museum."

He said for the country to be able to produce mining equipment locally, the education system and the finance sector would need a revolution.

There were myths about how wonderful South Africa's banking system was, Mbeki said.

"The reality is that our banking system is one of the major obstacles to the development of entrepreneurship in this country."

Mbeki is deputy chairperson of the South African Institute of International Affairs, which is an independent think-tank based at the University of the Witwatersrand.