THE MINERAL BENEFICIATION POLICY

PRESENTATION AT THE 3RD MINING LEKGOTLA

14 JULY 2014Gallagher Convention Center,

Midrand

The mineral beneficiation strategy was adopted by Government as policy The strategy represents an opportunity for South Africa - a fulcrum to

catalyse industrialisation and contribute towards a knowledge based economy.

The strategy is complementary to IPAP-series and other development programmes of Government

Provides strategic focus for the minerals’ industry i.t.o beneficiation Presents a coherent plan to:

– capture & maximise the “window of opportunity” inherent in natural resources (before they’re exhausted):

– align strategies for resources with the National Industrial Policy Framework– unlock downstream beneficiation of minerals– facilitate economic diversification – encourage the movement towards a knowledge based economy.

INTRODUCTION

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MINING VALUE ADD FRAMEWORK

Beneficiation is part of a broader policy and legislative framework that leverages more value from the mining sector beyond taxes and royalties.

This framework will enhance the beneficiation element of the framework and leverage on others

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BROAD VISION - BENEFICIATION

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Increase a ratio of beneficiation extent to mineral production, localise exports, increase export revenue

Facilitate economic diversification

Attain incremental GDP growth in mineral value addition and increase the country’s productive capacity

Expedite progress towards a consolidated knowledge based economy

Create opportunities for new enterprise development and a basis for radical economic transformation

Contribute to creation of decent jobs and poverty alleviation

Aligned to the New Growth Path

“Premised on the notion that Mineral Resources are finite, but creativity is unlimited”

INTERVENTIONS

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1. SECURITY OF RAW MATERIAL SUPPLY Strengthening beneficiation provisions contained in Section 26 of the

MPRDA, in order to: Empower government to avail requisite, qualities, quantities and timeframes

of minerals for local beneficiation cost competitively

2. QUANTIFICATION OF SA NEEDS – INDUSTRIALISATION AND BENEFICIATION An example of such a quantification/target is the objective set for SA to work

towards capturing 25% of global catalysis market – In the Hydrogen Strategy The Integrated Energy Plan (IEP) and the Integrated Resource Plan (IRP) also

provides quantification of energy requirements This enables government to work-out progressive quantities of input

material required to achieve this objective in terms of the proposed section 26 provisions of MPRDA Bill

INTERVENTIONS, CONT….

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3. MECHANISMS TO PASS THE BENEFITS TO LOCAL ECONOMY

4. INFRASTRUCTURE (implication of the National Infrastructure Prog) Infrastructure Programme to adequately feature beneficiation

requirements. E.g. Linkages of mining areas with envisaged beneficiation

centers Infrastructure Programme to enhance logistics efficiencies to ensure cost

effective transport to support “export led growth” of beneficiated products Energy security for beneficiation is critical (provisioning of electricity and

mechanisms to support co-generation) Development of mechanisms to use infrastructure (public good) as an

incentive for beneficiation

INTERVENTIONS, CONT….

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5. MARKET GENERATION, GROWTH AND ACCESS Strengthen the enforcement of the obligatory National Industrial Participation

Programme (NIPP), the Competitive Supplier Development Programme, the Preferential Procurement Policy Framework Act and the procurement provisions of the BBBEEA

Strengthen and enforce implementation of sector procurement provisions Integrated approach to monitoring and evaluation of mineral extraction, transportation,

local consumption into beneficiated goods and through customs Leverage the African growth story, e.g. the African infrastructure development

programme (PIDA), including the High speed train linking Africa cities Leverage multi-lateral agreements for access to beneficiated good

6. SKILLS DEVELOPMENT A dedicated effort towards development of skills needed to underpin the

beneficiation and industrialisation policies Mechanisms for limited expatriate skills transfer (with a maximum limit and a

proven progress on skills transfer and progress)7. RESEARCH AND DEVELOPMENT

Coordinated and targeted research and development programme for beneficiation to: Further enhance competitiveness of existing beneficiation initiatives in SA Create nascent industries

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Metals and minerals in a Smart Phone

• Copper (16 grams) ¹• Silver (0.35 grams) ¹• Gold (0.034 grams) ¹• Palladium (0.015 grams) ¹• Platinum (0.00034 grams) ¹• Ceramic magnetic switches

containing rare earths ²• Indium²• Titanium dioxide ²• Indium tin oxide ²

• ¹ source – USGS http://pubs.usgs.gov/fs/2006/3097/• ² source – NRC critical minerals report

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Metals and Minerals in a car• 960kg iron &steel

• 109kg Aluminum

• 22.7kg Carbon

• 19 kg Copper, 34kg for

a hybrid

• 19kg Silicon

• 11 kg Lead

• 10kg Zinc

• 7.7kg manganese

• 6.8kg Chromium

• 4.1kg Nickel

• 0.3 kg Platinum

• + Antimony, barium, beryllium, cobalt, gallium, gold, magnesium, molybdenum, neodymium, indium, palladium,

• Sulphur, rhodium, silver, strontium, tin, titanium, tungsten, vanadium, zirconium.

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Wind Turbine uses a significant amount of metals and minerals

• 335 tons of steel

(chrome included)

• 4.7 tons of copper

• 13 tons of fiberglass

• 3 tons of aluminum

• 1,200 tons of

reinforced concrete

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Cosmetics and makeup………

Constituent minerals:

• Talc

• Mica

• Kaolin

• Calcite

• Titanium

dioxide

• Zinc oxide

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Constituent

minerals:• Silica

• Limestone

• Aluminum

• Phosphate

• Fluoride

• Titanium

• Mica

• Petroleum

Even a bright smile, comes from mining…….

This beneficiation value proposition represents a potential win-win scenario for all stakeholders in domestic mineral value chains.

During the implementation of this provision, miners will not be expected to beneficiate, however will be expected to contribute.

Effective co-ordination across relevant departments and partnerships with both mining industry and manufacturers constitute key for successful implementation.

The mining charter off-set against ownership presents a further lever for the downward negotiation of mineral pricing for local beneficiation to attain greater cost competitiveness in manufacturing.

CONCLUDING REMARKS

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I Thank You

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