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Plan Emerging?

Plan Emerging?

5th December 2014

By: Terence Creamer
Creamer Media Editor

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Some visibility may, at last, be emerging around South Africa’s approach to the highly complex issue of beneficiation. It is understood that the Mineral Beneficiation Action Plan (MBAP), which is currently in draft form, should be finalised by the end of March.

Engineering News has confirmed that the Department of Trade and Industry (DTI) is leading the drafting process, which also involves the National Treasury, the Economic Development Department, the Department of Mineral Resources (DMR) and the Department of Science and Technology.

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The Economic Sectors, Employment and Infrastructure Development Cluster announced last month that the MBAP would seek to advance “local value addition across five mineral value-chains, namely, iron-ore and steel, platinum-group metals, polymers, titanium and mining inputs”.

The MBAP intends breaking down the objectives of the ‘Beneficiation Strategy’ into incremental and achievable targets, DTI deputy director- general Garth Strachan explains. It will also seek to identify specific policies and projects to enable South Africa to leverage its “comparative resource advantage to build a dynamic industrial economy”.

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Some elements of the plan will be incorporated into the mineral beneficiation section of the 2015/16 version of the rolling Industrial Policy Action Plan (Ipap), overseen by the DTI. But the other departments will also play a role in implementation, with the Ipap mainly focusing on the project components.

Strachan does not say whether the MBAP will incorporate the designation of certain minerals as “strategic”, stressing that the subject of possible designation resides with the DMR and is also subject to the signing of the Mineral and Petroleum Resources Development Amendment Bill.

He confirms, though, that the MBAP does not specifically define what government terms “developmental prices” for inputs such as steel and polymers. However, it will address access to and pricing of inputs into the selected value chains. “This will not be limited to mineral inputs only but the others as well,” Strachan explains, referring specifically to skills, electricity and logistics.

The department does not anticipate that the beneficiation policies and programmes facing the implementation difficulties currently being experienced in the metal scrap sector – domestic scrap consumers have reported that the preferential-pricing system launched in 2013 is failing to deliver improved pricing and availability.

“In primary minerals beneficiation the players are fewer, more long-term focused, have been in the business for decades and have much larger investments than in scrap.”

But Strachan insists that the MBAP will be fully canvassed with stakeholders before implementation, highlighting that there had been wide consultation on the projects being proposed for the next iteration of Ipap.

“The DTI remains convinced that there are real opportunities to be realised in the beneficiation space,” he argues.

That said, developments in the electricity supply sector cannot be overlook by the beneficiation advocates. It is far from certain that South Africa will, in the near term, have the affordable and stable electricity supply needed to support the MBAP.

To be sure, the absence of this vital ingredient is likely to be as large an impediment, perhaps larger, to higher levels of value addition than the pricing and supply of the other key inputs.

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