South Africa would finalise its consultations with stakeholders on a new minerals beneficiation framework, which was recently approved by Cabinet, by November, Advocate Sandile Nogxina, currently a special adviser to Minerals Development Minister Susan Shabangu, told mining investors in Australia this week.

Addressing the Africa Downunder Conference in Perth, Nogxina said the framework would outline the manner in which an “orderly development of the country’s mineral value chains will occur”. It would also “encourage the development of the mineral value chain to the point of final product manufacture where most of the labour-absorptive industries are located”.

The aim was to help diversify the South African economy away from traditional commodities and nontradable services, as well as to move beyond current capital-intensive beneficiation practices. “Not only will this increase economic activity down the value chain, but it will also increase economic activity within input sectors to the value chain,” Nogxina averred.

But his address came only days after the Energy Intensive User Group (EIUG), which comprises South Africa’s largest mining and industrial investors, cautioned that South Africa’s electricity prices, which have more or less doubled from an average real level of 25c/kWh in 2008 to the current level of 50c/kWh, were approaching an affordability “tipping point”.

In fact, the EIUG, warned that some smelters had already closed and that margins at others would become increasingly unattractive unless coordinated regulatory, policy and investment interventions were made to moderate the fast-rising electricity price path.

Current and possible future tariff increases could lead prices to rise beyond the 110c/kWh level by 2020, which the EIUG warned would result in disinvestment and undermine the policy aspiration of extracting further value from the country’s minerals ahead of export.

NATIONALISATION: DEBATE FOR DEBATES SAKE

Nogxina was also addressing investors at a time of growing disquiet about the policy, regulatory and legislative environment in South Africa, as well as serious concern about recent nationalisation rhetoric.

He stressed that, since 1994, South Africa had championed “pragmatic and prudent economic policy positions” and there was consensus that the resources sector would remain a key anchor for growth and development.

“We are mindful of the effects of the current nationalisation debate on our country as an investment destination. We are also mindful that there is nothing as unhelpful as debates for the sake of debate, particularly about things that may have long-term consequences for our nation”.

An African National Congress (ANC) task team researching the role of the State in the resources economy would be “clear and transparent” in the way it made its eventual recommendations and Nogxina was confident the ANC would take “sensible” decisions at its conference next year. “In the meantime, we will continue to be guided by existing government policies, which stand as an antithesis to what is currently being debated, which we will implement without any equivocation.”

Nevertheless, changes would be made to the Mineral and Petroleum Resources Development Act (MPRDA), which had been in operation for the past seven years.

The amendments, which would only be presented to lawmakers following detailed consultations with stakeholders, would deal with ambiguities in the current Act, while seeking to streamline administrative processes.

Included in the changes would be the creation of mechanisms to streamline licensing processes in respect of the issuance of rights, as well as water licences and environmental authorisations.

The amendments would also seek to align the MPRDA with the Cabinet-approved beneficiation strategy, including ensuring that there was sufficient feedstock available.

Other changes could relate to prescriptions regarding consultation processes to ensure that the rights and interests of landowners or lawful occupiers of land were sufficiently protected, the strengthening of the Minister’s powers to address the rehabilitation of derelict and ownerless mines and making provision for the processing of a single application to finality, before accepting other applications in respect of the same mineral and land, to avoid double granting.