1. MINING RESEARCH, DEVELOPMENT AND INNOVATION (RDI) PROGRAMME
Presentation to Science and Technology Portfolio Committee
6 June 2018

2. Programme objectives
Redress insufficient investment in mining extraction R&D to facilitate the shift from the current paradigm of traditional, conventional mining methods to integrated, next generation mining extraction technologies & systems
Revitalise mining research, development & innovation (RDI) capability in South Africa (SA) & reposition the country as top mining RDI destination
Advance the mining cluster through R&D in mining & mining equipment development
Develop technological solutions to increase safety & productivity, reduce costs & extend the life of mines (of platinum group metals (PGMs) & gold (Au) mines in SA beyond 2025)

3. Industry Context Problem statement
SA mining sector in crisis – facing confluence of short-term & deeper structural issues
Main problem
Mining’s contribution to gross domestic product (GDP) dropped from 21 % (1980) to just 8% (2016)1
Easily accessible resources are nearing depletion
Decreased production – lead global Au production in 2006, now ranked 7th
Declining commodities prices – exposed South African mines as uncompetitive – 80% of PGMs & 31% of Au mines are loss making
Essentially labour intensive – challenge of mining competitively & safely at deeper levels
Significant proportion of SA resources not mineable using existing technologies2
Increased costs
Zero harm
Environmental & social issues
Decreased productivity
Hard-rock, narrow reefs
compensation
Silicosis
Mine closure,
job losses
Abandoned
mines
Significance
Responds to the calls to support initiatives of the Mining Phakisa3
Fills a gap in mining extraction RDI
Risk
Industry participation - Government support to enable partnerships
Committed mining RDI fund – funding allocations for large R&D programmes
1. Statistics South Africa Article (2017): Mining: a brief history
2. Mining Phakisa Scoping Document (2015) & Report (2016)
3. As per Cabinet Memorandum No. 20 of 2016, for the Economic Sectors, Employment and Infrastructure Development (ESEID) Cabinet Committee Meeting of 09 November 2016

4. Policy & strategic context
Medium Term Strategic Framework (MTSF)
Outcome 4: Decent employment through inclusive economic growth
Sub-outcome 2: Productive sectors account for growing share of production & employment
Sub-outcome 10: Investment in RDI to support inclusive growth by enhancing productivity of existing & emerging enterprises & supporting the development of new industries
Nine Point Plan
Implementing a higher impact IPAP
STI as a cross-cutter
New Growth Path (NGP)
National Development Plan (NDP) 20304
Mining identified as key economic sector – comparative advantage & substantial mineral base
Highlights :
Role of science, technology & innovation (STI) to revolutionise the production of goods & services - also applicable to traditional sectors such as mining
Need for focused R&D to enable improved extraction methods to increase the life of mines
Industrial Policy Action Plan (IPAP)
Minerals Beneficiation Action Plan (MBAP)
Mining Phakisa
Sectorally focused intervention
4. National Development Plan Our Future-make it work (2011)

5. DST R&D-led industrial development
Strategic Objective 3 (P5)
To identify, grow and sustain niche high-potential STI capabilities that:
improve the competitiveness of existing & emerging economic sectors; &
facilitates the development of new targeted industries with growth potential in aerospace, advanced manufacturing, chemicals, mining, advanced metals & information & communication technologies (ICTs).
Number of high level research graduates (MSc & PhD) fully funded or co-funded in mining
Number of interns fully funded or co-funded (in R&D of design, manufacturing and product development)
Number of knowledge & innovation products added to the intellectual property (IP) portfolio through fully funded or co-funded research initiatives
Number of instruments funded in support of increased localisation, competitiveness & R&D-led industry development

6. South African mining in crisis
Post Mining Phakisa
No significant price movement;
Costs increases greater than consumer price index (CPI);
Continuing productivity decline;
Capital delays;
Operations on care & maintenance;
Curtailing in life of mines; and
No step change improvement in safety.
Solution
Modernisation of mining through optimisation & innovation that is inclusive but not limited to mechanisation & automation
5. CoM Presentation (2017)

7. Current, conventional deep-level mining
Au (billion ounces)
Drilling & blasting has been the basic method used since the early 1900s
Resource: 1.1
Mined: 1.7
Reserve: 0.2
Source: British Geological Survey
Manual, labour-intensive drilling methods
Less drill time due to depth (up to 3.5km) & distance (up to 3-4km)
PGMs (billion ounces)
Mined: 0.2
All this means lower production and higher costs
Beyond resources (2-4km): 0.7
Resource
(1-2km): 0.5
Conditions of hard & abrasive rock, narrow reefs & steep gradients-limited depth due to seismicity and heat
Stop-start operations due to blasting
Source: R G Cawthorn
6. CoM Presentation: Next Generation Mining Systems Research (2015)

8. Effect of modernisation on mining
Contributes towards the survival of the SA mining industry;
Enables the mining of lower grades, as well as deeper resources;
Significantly extends the life of mines;
Preserves mine employment; &
Improves health & safety.
7. CoM Presentation: Next Generation Mining Systems Research (2015)

9. Mining R&D in broader R&D context
R&D expenditure increased in all sectors
Business sector largest contributor
4. South African National Survey of Research and Experimental Development 2014/15 (2017)

10. Mining R&D in broader R&D context
Within the business sector – mining sector third largest contributor at 10.1%
4. South African National Survey of Research and Experimental Development 2014/15 (2017)

11. Mining R&D in broader R&D context
Proportional expenditure for 2014/15
No disaggregation of Government, science councils & higher education R&D spending by SIC in the National R&D Survey – difficult to assess trends of public sector
Use R&D expenditure by socio-economic objective of economic development for snapshot
Business :10,6%
Science councils: 4,6%
Higher education: 1,5%
Government: 0,3%
4. South African National Survey of Research and Experimental Development 2014/15 (2017)

12. Mining R&D in broader R&D context
EXPLORATION
EXTRACTION
PROCESSING
PRODUCTS
Parliamentary grant (PG)5
(public funded pre-competitive geological data)
2014/15:
2015/16:
2016/17:
R265m
R307m
R341m
Fragmented – uncoordinated
– unaligned R&D activities
R320m
R362m
R315m
Minerals processing & beneficiation seen as opportunities for future growth
Expanded to include upstream mining activity
No – little official support & development of mining extraction
Estimates of National Expenditure (ENE) Vote 29: Mineral Resources

13. History of mining R&D
1955
2000
1985
1970
2015
1964
Chamber of Mines Research Organisation (COMRO) established
Au mining research dominant
1966
Collieries Research Laboratory established in COMRO
1974
Accelerated research programme due to increasing Au prices
Work in rock engineering, rock-breaking, hydraulic support systems, refrigeration & human resources
Early 90s
Reduced research programme due to decreasing Au prices
COMRO’s benefit to industry raised
Simultaneous Chamber of Mine (CoM) restructuring
COMRO merged with CSIR
Mining Technology (Miningtek) Division established
Elective research programme established - research projects identified & funded by CoM
1997
Elective research programme terminated when industry support dropped below critical mass
1998
Deepmine formally commenced
Collaborative research programme (CRP) between CSIR, CoM & participating Au companies – jointly funded by partners
Technology development to mine economically & safely at depths from 3 – 5km
Terminated in 2001 when partners concluded that mining at such depths was uneconomical at the time
2000s
Futuremine commenced
CRP Intended to build on knowledge developed by Deepmine to develop Au mining technologies
Terminated as result of participant withdrawal
2013 – 14
CSIR’s Centre for Mining Innovation (CMI) disbanded
CSIR Mining Research Interest Area (RIA) established
6. CoM Document: Research in the South African mining industry ( 2012)

14. Programme development
PRE-MINING PHAKISA
MINING PHAKISA LAB
POST MINING PHAKISA
JAN-SEPT 2015
OCT-NOV 2015
MAR 2016-MAR 2017
- Contracting CSIR for programme implementation
- Draft SAMERDI Strategy
- Development of collaborative initiatives
- Consolidation of SAMERDI Strategy
- Establishment of Mining Precinct & Hub
- Additional funding secured

15. Mining Hub
Mining RDI will be coordinated through the Mining Hub – hub & spoke model
Mining Hub will be housed in the Mining Precinct
Mining Hub will based on a public-private cooperation
Membership will be based on financial contributions
Mining Hub management processes finalised

16. South African Mining Extraction RDI (SAMERDI) Strategy
Rock Innovation Programme (DST)
A Technology Innovation Roadmap for the South African Minerals Industry (DMR)
SOUTH AFRICAN MINING EXTRACTION RESEARCH, DEVELOPMENT & INNOVATION (SAMERDI) STRATEGY
“To maximise the sustainable returns of South Africa’s mineral wealth through collaborative RESEARCH, DEVELOPMENT, INNOVATION & IMPLEMENTATION of mining technologies in a socially, environmentally and financially sustainable manner that is rooted in the local community and national economy.”

17. Mining RDI programme

18. Mandela Mining Precinct & Hub
CSIR Carlow Road facilities seen as historic home of mining R&D – ex COMRO
Rationale is to house a community for mining RDI activities thereby facilitating collaboration
Building 1: House researchers & stakeholders temporarily or permanently based on projects
Building 2: Negotiating with the Southern African Institute of Mining & Metallurgy (SAIMM) to convert into conferencing venue & administrative building
Building 3: Testing facilities
Building 4: Warehouse - platform for next generation mining systems, robotics, remote sensors, conveyor belt testing, etc.
Additional space
Occupancy currently includes CSIR mining personnel, Mining Phakisa Secretariat, CoM consultants, Coaltech & Mining Equipment Manufacturers of South Africa (MEMSA)

19. Mandela Mining Precinct & Hub
Mining R&D will be coordinated through the Mandela Mining Hub – hub & spoke model
Mining Hub will be housed in the Mandela Mining Precinct
Mining Hub will have a Research Advisory Steering Committee (RASC) – with a governance & oversight role
RASC to consist of senior decision makers
Project proposals, aligned to the SAMERDI project charters will be assessed & awarded by RASC
Project implementation & monitoring via the Mining Hub
Mining Hub management processes being finalised
RASC
DST
DMR
THRIP
OEMs
Mining houses
CoM
CSIR
the dti

20. Mining R&D programme

21. Mining Equipment Manufacturing
Partnership with industry for mining equipment RDI
Supports the dti’s Resources Capital Goods Development Programme (RCGDP) to stimulate & expand the capital goods sector
Options include mechanised drill & blast mining systems (PGMs & Au) & non-explosive 24/7 mechanised mining systems
Mining Hub and RASC with linkages to the manufacturing cluster will take this component forward
Ultimately provides the opportunity for SA to develop world leading technology & manufacturing cluster

22. DST investment (R’000) R16 964 000 to date Activity & funding source
Financial year
TOTAL
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
RIP Phase I – RBI
1 867
304
2 171
Mining Precinct – IIPF
4 000
14 793
SAMERDI Strategy Phase I – RBI
6 793
Mining equipment development – IIPF
Mining Precinct – MTEF
27 000
63 000
60 000
SAMERDI Strategy Phase II – MTEF
Mining equipment development – MTEF
Superseded by events of the Mining Phakisa
Displaced by securing of larger funding allocations – business plan & contract to be amended in response to this

23. Conclusions Investment in mining RDI is essential:
to help restore industry competitiveness
Strengthen competitiveness of Mining Equipment Manufacturers
Building blocks for a successful RDI partnership has been established
Chamber of Mines’ R&D contribution (1:2)
Mining Equipment manufacturers receives support from DST’s Technology localisation programme
SAMERDI Steering Committee is operational
Formal DMR invitation for representation has been sent
Next steps
Manage RDI for maximal impact on mine survival and competitiveness
Start groundwork for a dedicated Mining RDI science council
Further expand collaboration & coordination with Mine Health & Safety Council – to ensure maximal utilisation of investments

24. Thank you