Kumba's profit has fallen. Photo: Simphiwe Mbokazi.

South Africa is drawing up laws to force platinum and iron ore mining companies to sell “small amounts” of production to local processors at a discount to diversify its economy, a top trade ministry official said on Wednesday.

The idea is to encourage more domestic metal processing and grow industries such as platinum fuel cell production and auto manufacturing in order to create new jobs, Lionel October, director-general of the Ministry of Trade and Industry, said.

“Our competitive advantage is access to the raw materials. That is why we must give access to the raw materials at developmental prices,” October told Reuters.

“We are proposing amendments to the minerals act that will give the minister the power, as a condition of the license, that a certain percentage of production goes to the downstream industry at a developmental price,” he said.

The government plans to submit the draft legislation to parliament next year but has not set exact percentages for the amounts to be sold locally or the market discount. - Reuters