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MINERAL BENEFICIATION IN
SOUTH AFRICA
PRESENTATION TO THE SELECT COMMITTEE ON
ECONOMIC DEVELOPMENT
26 FEBRUARY 2013
PRESENTATION OUTLINE

Basis for Mineral Beneficiation

Mineral Beneficiation: The Current State

Beneficiation Strategy Overview

Strategy Implementation Framework

Mineral Beneficiation: The Way Forward

Concluding Remarks
2
BASIS FOR MINERAL BENEFICIATION
White Paper: The Reconstruction
Programme (November 1994)
and
Development
“Mining and minerals products contribute three-quarters of our
exports and the industry employs three-quarters of a million
workers, but this could be much higher if our raw materials were
processed into intermediate and finished products before export.
Our RDP must attempt to increase the level of mineral
beneficiation through appropriate incentives and disincentives in
order to increase employment and add more value to our natural
resources before export. Moreover, this policy should provide
more appropriate inputs for manufacturing in South Africa.”
3
BASIS FOR MINERAL BENEFICIATION
White Paper: A Minerals and Mining Policy for South Africa
(October 1998)
“The aim of the policy will be to develop South Africa’s mineral
wealth to its full potential and to the maximum benefit of the
entire population. Government, therefore, will promote the
establishment of secondary and tertiary mineral-based industries
aimed at adding maximum value to raw materials.”
Section 26, MPRDA, 2002
The Minister may initiate or prescribe levels of beneficiation of
minerals in the Republic
4
BASIS FOR MINERAL BENEFICIATION
THE NATIONAL DEVELOPMENT PLAN
 Country’s long term plan to 2030
 Seeks amongst other things to reduce unemployment by improving
manufacturing
 The New Growth Path, which is a short term plan drawing from the
NDP goes into detail with the work that has to be done
THE NEW GROWTH PATH


Sets a target of creating 5 million jobs in 10 years
Identifies structural challenges that impede desired growth rates,
Seeks to place the economy on a production-led trajectory with
growth targeted in 10 ‘job drivers’, including, inter alia:
 The mining value chain, with a particular emphasis on mineral
beneficiation as well as on increasing the rate of mineral
extraction
5
MINERAL BENEFICIATION:
THE CURRENT STATE
Ferrochrome
Titanium Oxide
Steel
Coal to Liquids
Auto catalysts
MINERAL BENEFICIATION:
THE CURRENT STATE
Composition of South Africa’s exports in 2010
Source: SARS
BENEFICIATION STRATEGY OVERVIEW
BROAD VISION

Increase a ratio of beneficiation extent to mineral production
and increase export revenue

Facilitate economic diversification

Expedite progress towards a knowledge based economy

Create opportunities for new enterprise development

Contribute to creation of decent jobs and poverty alleviation
8
Cross Cutting
Constraint
Potential Instruments at Government’s disposal Action by Business
Limited access to raw
materials for local
beneficiation
 Leverage the state’s custodianship of the country’s minerals to
 Take advantage of the
facilitate downstream beneficiation
mineral value proposition
 The MPRDA is currently being amended to strengthen
to expand local demand
beneficiation provisions
for mineral ores
 Leverage on the beneficiation offset element of the Mining
 Comply with legislation
Charter
 Strengthen and leverage on existing pieces of legislation such as
Diamond export levy to promote reliable access to raw materials
Shortages of critical
Infrastructure
 Leverage on existing infrastructure planning mechanisms and
programmes such as the critical infrastructure programme to
properly consider infrastructure requirements for mineral
beneficiation
 Leverage on the NGP, which seeks to unlock infrastructure
bottlenecks through massive expansion of transport, energy,
water, and communications capacity.
 Utilise the state’s infrastructure (public good) as an effective
instrument to promote local beneficiation
 Align production plans
with national programs
 Embrace energy
efficiency
 Explore co-generation
prospects
Limited exposure to
Research and
Development
Inadequate skills
 Leverage on the ten year plan for science and technology
 Support and develop
competitive technologies
Access to international
markets
 Implementation of international trade agreements to enhance
mineral beneficiation in RSA (investment $ markets))
 Promote skills development and partner with the relevant SETA’s  Investment in Human
for training and labour development
Capital Development
 Leverage on and enhance the National Skills Development
 Co-operate with
Strategy and the Sector Skills Plans for required skills
government to leverage
and enhance the National
Skills Development
Strategy and the Sector
Skills Plans for required
skills
 Leverage on trade
agreements
9
STRATEGY FRAMEWORK
COMPETITIVE
ADVANTAGE
COMPARATIVE
ADVANTAGE
MINERAL
RESOURCES
RESERVOIR
[IN SITU
VALUATION OF
US$2.5 Trillion
(Non-energy)]
BENEFICIATION
STRATEGY
PROVIDES A
FRAMEWORK
TO TRANSLATE
COMPARATIVE
ADVANTAGE
(Strategy Pillars)
• Legislative Framework
(MPRDA, DAA etc.)
• Multi stakeholder forums
(e.g. Platinum
Beneficiation
Committee)
• International trade
agreements
• Beneficiation strategic
interventions
10
BENEFICIATION STRATEGY OVERVIEW
5 value chains selected to qualitatively demonstrate the value
proposition of beneficiation

Energy commodities

Iron and steel

Pigment and titanium metal production

Autocatalytic converters and diesel particulate

Jewellery fabrication
11
IMPLEMENTATION FRAMEWORK
Two value chain specific implementation framework
developed and approved
RESEARCH AND
DEVELOPMENT
INFRASTRUCTURE
SKILLS
DEVELOPMENT
ENERGY COMMODITIES VALUE CHAIN
SUPPLY SIDE
INTERVENTIONS

12
DEMAND SIDE
INTERVENTIONS
INFRASTRUCTURE
DEVELOPMENT
RESEARCH AND
DEVELOPMENT
SKILLS
DEVELOPMENT
INDUSTRIAL
FINANCING
SUPPLY SIDE
INTERVENTIONS
IMPLEMENTATION FRAMEWORK
(CONT…)
IRON AND STEEL VALUE CHAIN
13
IMPLEMENTATION FRAMEWORK
(CONT…)

Consolidated implementation framework currently under
development with all constituent value chains as
chapters

The framework is intended to provide a comprehensive
set of interventions that will create an enabling
environment to prioritise and accelerate local mineral
beneficiation development
 The
framework is an elaboration of the beneficiation
policy, as adopted in June 2011, with emphasis on
synergies and integration of existing beneficiation
interventions in order to maximise the development
impact
14
MINERAL BENEFICIATION:
THE WAY FORWARD

The Beneficiation strategy implementation framework seeks
to strengthen linkages between sections of the value chains

Successful implementation will require:

Coordination across all three spheres of Government to
leverage on synergies between provinces

Coordination is also intended to optimise beneficiation
implementation spread across provinces, discerning from
the national developmental priority
15
CONCLUDING REMARKS

Beneficiation is not an event but a process with game changing
economic opportunities for South Africa

The strategy presents an ideal opportunity to contribute towards
balanced spatial economic development paradigm

Intensification of beneficiation represents win-win phenomenon for
South Africa Inc. including participants across the various mineral
value chains
16
ENDS.....
17