Prices and beneficiation bug chamber

South Africa’s biggest mine operators are ready to supply ore for domestic processing under government plans to boost local industry – as long as they get market rates.

The Chamber of Mines had presented its position in talks with MPs, Khanyisile Kweyama, the vice-president of the chamber, said yesterday.

Chamber of Mines vice-president Khanyisile Kweyama says forcing mining firms to build processing plants adds to uncertainty for investors. Photo: Simphiwe Mbokazi. Credit: Independent Newspapers

They are discussing amendments to the 2002 Mineral and Petroleum Resources Development Act that are aimed at increasing the benefits South Africans get from the country’s minerals.

Mining companies say proposals for an obligation to process ore in the country and price-setting by the state would hurt their businesses and discourage investment.

“We’re the ones that know how much input goes into” the cost of mining and prices, Kweyama, who is also an executive director at Anglo American South Africa, said in an interview in Cape Town. Anglo got more than 45 percent of its sales from South Africa in 2012.

Forcing mining companies to build processing plants added to uncertainty for investors, Kweyama said separately at the Mining Indaba. “And it offers no guarantees that it would lead to development of secondary industry.”

Mineral Resources Minister Susan Shabangu said the changes did not seek to force companies to process their output locally.

Speaking at the conference in Cape Town yesterday, Shabangu said she expected the amendments to be passed before Parliament adjourned for elections within a few months.

Kweyama said mining companies and MPs had agreed on seven of the nine concerns raised when the amendments were unveiled in 2012. They had not reached agreement on local processing and prices.

“We can safely say that at this stage we are much closer than before,” she said. “We’re never going to be 100 percent aligned because we understand that there is a role that the regulator plays and there is a role that business plays.” – Bloomberg