Dineo Faku

GOVERNMENT, business and labour had to partner as a matter of urgency to resolve the issues which were stifling the prospects of beneficiating minerals, experts said at the Transformation Indaba held in Pretoria yesterday.

Despite South Africa having the biggest reserves of platinum, chrome, iron ore and other mineral wealth worth an estimated $2.5 trillion (R21.9 trillion), most minerals are exported as ores or semi-processed rather than as high value intermediate or finished products.

In a move to boost downstream industries and create skilled jobs, the government adopted a beneficiation strategy which entails processing raw minerals before export.

It identified five minerals that would be prioritised, namely manganese, iron ore, coal, platinum and titanium.

Yesterday delegates at the Indaba discussed among other issues, the frustrations of the mining companies as players in the beneficiation space under the theme “diversifying the economy through beneficiation”.

Neale Baartjies, a director for mineral economics and resources at consulting firm Eco Partners, called for the implementation of the beneficiation act under a different authority.

“Too many acts are not implemented. I would change where the beneficiation act is housed. I would house [it] under the Department of Trade and Industry and Treasury, instead of the Department of Mineral Resources. A lot of incentives, including tax, come from these departments rather than the minerals department,” he said.

Other concerns were a lack of co-ordination between the government departments. Also, there was no single definition for beneficiation and there was a need for a single definition of the beneficiation act, Baartjies said.

Ebrahim Takolia, the head of mining advisory service practice at Deloitte, said South Africa could have a beneficiation strategy and that problems arose if there were no markets for the products, which was an issue for both the government and mining businesses. He said there was resistance from mining companies to beneficiate minerals and further in the value chain as they were not in the business of manufacturing, Takolia said.

“Investors want to invest in minerals, once a mining company beneficiates it becomes a different mining company.

“In the long term, mining companies don’t want to be directly involved, but they can facilitate the beneficiation.”

The aim of the indaba, which continues today, was for the industry to look at the state of transformation and go beyond the transforming to meet regulations by working together to achieve change and secure a future in mining.

Issues that were discussed included regulatory changes and the impact on transformation, and public-private partnerships.