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BENEFICIATION STRATEGY: PROGRESS ON

IMPLEMENTATION

PRESENTATION TO MINERAL RESOURCES PARLIAMENTARY

PORTFOLIO COMMITTEE

12 SEPTEMBER 2012

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PRESENTATION OUTLINE

BROAD VISION

BASIS FOR MINERAL BENEFICIATION

MINERAL BENEFICIATION AND NATIONAL ECONOMIC

PRIORITIES

SOUTH AFRICA’S COMPARATIVE ADVANTAGE

EXISTING INTERVENTIONS TO PROMOTE MINERAL

BENEFICIATION

IMPLEMENTATION OF THE STRATEGY

CONCLUDING REMARKS

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Accelerate the resource based industrialisation programme

Increase a ratio of beneficiation extent to mineral production

and enhance export revenue

Facilitate economic diversification

Expedite progress towards a knowledge based economy

Create opportunities for new enterprise development

Contribute towards incremental productive capacity, creation

of decent jobs and poverty alleviation

BROAD VISION

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In 1994, Government White Paper Stated

“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 programmes 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.”

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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

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BASIS FOR MINERAL BENEFICIATION

THE NEW GROWTH PATHA labour absorbing production-led trajectory with growth targeted in 10 ‘job drivers’, including:

The mining value chain, with a particular emphasis on mineral beneficiation as well as on increasing the rate of mineral extraction

Jobs Driver Beneficiated (Manufactured) product

Mineral inputs

Infrastructure (PICC)

Energy, Steel, cement, stainless steel

Ferrous mineralsIndustrial mineralsEnergy minerals

Agriculture value chain

Fertilizer, machinery, Polymers

Industrial mineralsFerrous minerals

Manufacturing Steel, Stainless steel, Polymers, Alloys

Ferrous mineralsPrecious mineralsEnergy mineralsIndustrial minerals

Green Economy Flat steel products, thin film for solar PVs, advanced battery technologies

Ferrous mineralsPrecious mineralsRare earth elements7

MINERAL BENEFICIATION AND NATIONAL ECONOMIC PRIORITIES

INDUSTRIAL POLICY ACTION PLAN (IPAP)Innovation and Technology

R&D and innovation in minerals processing and applications

Metal Fabrication, Transport and Capital Equipment; Steel (iron, coking coal, manganese) Stainless steel

Special Economic Zones (SEZs): Bill currently in Parliamentary process Platinum fuel cell manufacturing pilot

NATIONAL DEVELOPMENT PLANProtection of nascent niches in mineral beneficiation Emphasis on building upon comparative advantage, existing capacity and linkages to downstream manufacturing

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MINERAL BENEFICIATION AND NATIONAL ECONOMIC PRIORITIES

0 10 20 30 40 50 60 70 80 90 100

PGM'sManganese

ChromiumGold

Alumino-SilicatesVermiculiteVanadium

Zirconium MineralsTitanium minerals

FluorsparAntimony

Phosphate rockNickel

UraniumLeadCoalZinc

SiliconIron ore

% of global .South African reserves for key minerals, 2008

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1

1

1

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2

2

2

4

4

5

5

6

8

8

8

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South Africa, is not mature mining real estate! The country still has significant geological potential

Global rank

SOUTH AFRICA’S COMPARATIVE ADVANTAGE

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EXISTING INTERVENTIONS TO PROMOTE BENEFICIATION

Government has a number of interventions to support mineral beneficiation

Mintek is a statutory science council mandated and resourced to undertake beneficiation related research. Current projects include: Hercules – a low cost stainless steel for use in structural

applications

Research in production of ultra fine grain steel for

automotive applications

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EXISTING INTERVENTIONS TO PROMOTE BENEFICIATION (CONT…) Diamonds and Precious Metals

The Diamonds Act as amended established the SDT and

SADPMR to promote equitable access to, and local

beneficiation of diamonds and precious minerals

SDT - is empowered by law to secure 10% ROM (by

value) from producers for locally based beneficiators

SADPMR – is established to enforce tenets of legislation

that are designed to promote local beneficiation (e.g.

Export Levy)

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EXISTING INTERVENTIONS TO PROMOTE BENEFICIATION (CONT…)

Energy CSIR’s research into advanced battery technologies for

stationary and mobile applications

DST led: National Hydrogen and Fuel Cell Technologies

Research, Development and Innovation Strategy (HySA)

Advanced Metals Initiative DST led: Novel Titanium Metal manufacturing process

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IMPLEMENTATION OF THE STRATEGY

Two value chain specific implementation plans developed

and approved

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ENERGY COMMODITIES VALUE CHAIN

IMPLEMENTATION OF THE STRATEGY (CONT…)

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IRON AND STEEL VALUE CHAIN

IMPLEMENTATION OF THE STRATEGY (CONT…)

Consolidated implementation plan currently under development with all constituent value chains as chapters

The plan is intended to provide a comprehensive set of interventions that will create an enabling environment to prioritise and accelerate local mineral beneficiation development

The plan 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

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IMPLEMENTATION OF THE STRATEGY (CONT…)

The implementation plan introduces measures to

enhance markets for beneficiated products (local,

regional and international):

Local market: through government’s drive for local content

(government and private sector procurement

requirements)

Regional and International Markets:

o Leverage existing trade agreements for market access

o Leverage RSA’s membership of several economic blocs, such

as BRICS

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IMPLEMENTATION OF THE STRATEGY (CONT…)

The overall structure of the implementation plan document will therefore be:

Determination of future national, regional and

international mineral requirements

Setting targets for beneficiated mineral based sectors,

where none exist, based on the future global mineral

requirements to inform mineral requirements for local

beneficiation

Delineation of interventions to realise targets

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CONCLUDING REMARKS Mineral beneficiation is a fulcrum for the country’s

resource based industrialisation The consolidated implementation plan is near finalisation

(target date: end October 2012). The plan Emphasises coordination of Government programmes to

maximise the socio economic development impact Includes comprehensive action plans for identified value

chains Identifies enabling regulatory framework and proposes

augmentation thereof Mineral beneficiation provisions contained in the MPRDA

are being strengthened through the current phase of amendments

MINTEK will be mandated to be the beneficiation implementation agency

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ENDS.....

Inspiring new ways

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