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2. BENEFICIATION STRATEGY: PROGRESS ON IMPLEMENTATION PRESENTATION TO MINERAL RESOURCES PARLIAMENTARY PORTFOLIO COMMITTEE 12 SEPTEMBER 2012 2

3. 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 3

4.  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 4

5. 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.” 5 BASIS FOR MINERAL BENEFICIATION

6. 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 6 BASIS FOR MINERAL BENEFICIATION

7. THE NEW GROWTH PATH  A 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 DriverBeneficiated (Manufactured) product Mineral inputs Infrastructure (PICC) Energy, Steel, cement, stainless steel Ferrous minerals Industrial minerals Energy minerals Agriculture value chain Fertilizer, machinery, Polymers Industrial minerals Ferrous minerals ManufacturingSteel, Stainless steel, Polymers, Alloys Ferrous minerals Precious minerals Energy minerals Industrial minerals Green EconomyFlat steel products, thin film for solar PVs, advanced battery technologies Ferrous minerals Precious minerals Rare earth elements 7 MINERAL BENEFICIATION AND NATIONAL ECONOMIC PRIORITIES

8. 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 PLAN  Protection of nascent niches in mineral beneficiation  Emphasis on building upon comparative advantage, existing capacity and linkages to downstream manufacturing 8 MINERAL BENEFICIATION AND NATIONAL ECONOMIC PRIORITIES

9. SOUTH AFRICA’S COMPARATIVE ADVANTAGE 9

10. 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 10

11. 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) 11

12. 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 12

13. IMPLEMENTATION OF THE STRATEGY  Two value chain specific implementation plans developed and approved 13 SUPPLY SIDE INTERVENTIONS ENERGY COMMODITIES VALUE CHAIN RESEARCH AND DEVELOPMENT SKILLS DEVELOPMENT INFRASTRUCTURE

14. IMPLEMENTATION OF THE STRATEGY (CONT…) 14 DEMAND SIDE INTERVENTIONS SUPPLY SIDE INTERVENTIONS IRON AND STEEL VALUE CHAIN RESEARCH AND DEVELOPMENT SKILLS DEVELOPMENT INFRASTRUCTURE DEVELOPMENT INDUSTRIAL FINANCING

15. 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 15

16. 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 16

17. 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 17

18. 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 18

19. ENDS..... Inspiring new ways 19