Davos - Trade and Industry Minister Rob Davies, speaking to Business Report on the sidelines of the World Economic Forum’s (WEF) annual meeting in Davos, Switzerland, for the first time placed a timeline on the proposed platinum-based special economic zones envisaged for Limpopo and the North West and which will ultimately be rolled out across the country.
South Africa will look at repurposing its vast platinum reserves this year, signalling a significant move for an industry crippled by the bottoming out of commodity prices, and the purging of tens of thousands of jobs.
South Africa sits atop 85 percent of the world’s platinum reserves, but the sector has been battered by labour unrest, making investors nervous about staying the course.
Asked to specifically provide a time frame for the project, Davies said: “In the course of this coming year. We will have to wait on the special economic zones advisory council… we hopefully will proclaim a platinum beneficiation special economic zone this year.”
Davies said one of the industries being looked at was the “cutting edge industry which is fuel cells”. He added: “We’ve got quite a lot of buy-in from stakeholders around the importance of this. This would be the development of fuel cells using platinum as a catalyst, but using gas which is turned into water and releases energy.”
Davies said energy could be used for small power stations.
He said by some calculations if, for example, schools and clinics were more than 20 kilometres from the grid, it would be cheaper for them to be hooked up to a fuel cell power station that could generate power.
“This would be to beneficiate and create a new use for platinum. There is an interest in this and everyone understands this is an importing thing.”
Beneficiation
Davies, however, cautioned that in as much as beneficiation is important and technology driven, it may not be able to absorb and make a real dent in South Africa’s unemployment.
“Employment growth is not commensurate in terms of technological beneficiation.”
In August, John Capel, the executive director of Bench Marks Foundation, in assessing the platinum industry and Anglo American in particular, said: “Anglo is selling off non-profitable mines, but this does not always mean loss-making mines.
According to Bench Marks Foundation’s research study, Policy Gap 7, coping with unsustainability, and Anglo American Platinum’s (Amplats) June 2013 interim report, worker productivity at the Khuseleka and Khomanani platinum mines was 20 percent higher than at its other platinum mines and had doubled its productivity levels. In addition, they had a life span of 20 years.
According to Policy Gap 7, “unprofitable” does not mean loss-making but less profit.
“The average operating margin for the three biggest platinum producers, Amplats, Impala Platinum and Lonmin, taken together, has been close to 30 percent over 20 years.”
Addressing the WEF’s theme – The Fourth Industrial Revolution – Davies said regionalisation in terms of intra-African trade had improved.
“We need to make our own decisions and look at differing interests so that we develop our own views and develop our own policies and trade policies.”
Of Africa in the context of the WEF’s theme, Davies said it was important to remember that “we have our own mega-region and the possibility exists for regional value chains”.
He admitted that South Africa’s knowledge economy needed to be prioritised and endorsed Science and Technology Minister Naledi Pandor’s request to Treasury for her allocation to be increased so that South Africa could be on a par with its African counterparts in terms of spend when it came to science and technology.
Challenges
“In terms of our ICT capabilities, we need to take into account skills development, which is critical if we are to benefit from the Fourth Industrial Revolution.
Despite the challenges, Davies said South Africa could be competitive in the manufacturing sector, citing the use of robotics in motor manufacturing plants as an example of the country not being alien to incorporating technology in its manufacturing processes.
“People in South Africa are quite capable of leading the process.”
BUSINESS REPORT