MINERAL BENEFICIATION IN SOUTH AFRICA

1. MINERAL BENEFICIATION IN SOUTH AFRICA PRESENTATION TO THE SELECT COMMITTEE ON ECONOMIC DEVELOPMENT 26 FEBRUARY 2013

2. PRESENTATION OUTLINE • Basis for Mineral Beneficiation • Mineral Beneficiation: The Current State • Beneficiation Strategy Overview • Strategy Implementation Framework • Mineral Beneficiation: The Way Forward • Concluding Remarks

3. BASIS FOR MINERAL BENEFICIATION White Paper: The Reconstruction and Development Programme (November 1994) “Mining and minerals products contribute three-quarters of our exports and the industry employs three-quarters of a million workers, but this could be much higher if our raw materials were processed into intermediate and finished products before export. Our RDP must attempt to increase the level of mineral beneficiation through appropriate incentives and disincentives in order to increase employment and add more value to our natural resources before export. Moreover, this policy should provide more appropriate inputs for manufacturing in South Africa.”

4. BASIS FOR MINERAL BENEFICIATION White Paper: A Minerals and Mining Policy for South Africa (October 1998) “The aim of the policy will be to develop South Africa’s mineral wealth to its full potential and to the maximum benefit of the entire population. Government, therefore, will promote the establishment of secondary and tertiary mineral-based industries aimed at adding maximum value to raw materials.” Section 26, MPRDA, 2002 The Minister may initiate or prescribe levels of beneficiation of minerals in the Republic

5. BASIS FOR MINERAL BENEFICIATION • THE NATIONAL DEVELOPMENT PLAN • Country’s long term plan to 2030 • Seeks amongst other things to reduce unemployment by improving manufacturing • The New Growth Path, which is a short term plan drawing from the NDP goes into detail with the work that has to be done • THE NEW GROWTH PATH • Sets a target of creating 5 million jobs in 10 years • Identifies structural challenges that impede desired growth rates, Seeks to place the economy on a production-led trajectory with growth targeted in 10 ‘job drivers’, including, inter alia: • The mining value chain, with a particular emphasis on mineral beneficiation as well as on increasing the rate of mineral extraction

6. MINERAL BENEFICIATION: THE CURRENT STATE • Ferrochrome • Titanium Oxide • Steel • Coal to Liquids • Auto catalysts

7. MINERAL BENEFICIATION: THE CURRENT STATE Composition of South Africa’s exports in 2010 Source: SARS

8. BENEFICIATION STRATEGY OVERVIEW • BROAD VISION • Increase a ratio of beneficiation extent to mineral production • and increase export revenue • Facilitate economic diversification • Expedite progress towards a knowledge based economy • Create opportunities for new enterprise development • Contribute to creation of decent jobs and poverty alleviation

10. STRATEGY FRAMEWORK COMPARATIVE ADVANTAGE MINERAL RESOURCES RESERVOIR [IN SITU VALUATION OF US$2.5 Trillion (Non-energy)] • COMPETITIVE ADVANTAGE • (Strategy Pillars) • Legislative Framework • (MPRDA, DAA etc.) • Multi stakeholder forums (e.g. Platinum Beneficiation Committee) • International trade agreements • Beneficiation strategic interventions BENEFICIATION STRATEGY PROVIDES A FRAMEWORK TO TRANSLATE COMPARATIVE ADVANTAGE

11. BENEFICIATION STRATEGY OVERVIEW 5 value chains selected to qualitatively demonstrate the value proposition of beneficiation • Energy commodities • Iron and steel • Pigment and titanium metal production • Autocatalytic converters and diesel particulate • Jewellery fabrication

12. IMPLEMENTATION FRAMEWORK • Two value chain specific implementation framework developed and approved ENERGY COMMODITIES VALUE CHAIN SKILLS DEVELOPMENT RESEARCH AND DEVELOPMENT SUPPLY SIDE INTERVENTIONS INFRASTRUCTURE

13. IMPLEMENTATION FRAMEWORK (CONT…) IRON AND STEEL VALUE CHAIN INDUSTRIAL FINANCING SKILLS DEVELOPMENT RESEARCH AND DEVELOPMENT INFRASTRUCTURE DEVELOPMENT SUPPLY SIDE INTERVENTIONS DEMAND SIDE INTERVENTIONS

14. IMPLEMENTATION FRAMEWORK (CONT…) • Consolidated implementation framework currently under development with all constituent value chains as chapters • The framework is intended to provide a comprehensive set of interventions that will create an enabling environment to prioritise and accelerate local mineral beneficiation development • The framework is an elaboration of the beneficiation policy, as adopted in June 2011, with emphasis on synergies and integration of existing beneficiation interventions in order to maximise the development impact

15. MINERAL BENEFICIATION: THE WAY FORWARD • The Beneficiation strategy implementation framework seeks to strengthen linkages between sections of the value chains • Successful implementation will require: • Coordination across all three spheres of Government to leverage on synergies between provinces • Coordination is also intended to optimise beneficiation implementation spread across provinces, discerning from the national developmental priority

16. CONCLUDING REMARKS • Beneficiation is not an event but a process with game changing economic opportunities for South Africa • The strategy presents an ideal opportunity to contribute towards balanced spatial economic development paradigm • Intensification of beneficiation represents win-win phenomenon for South Africa Inc. including participants across the various mineral value chains

17. ENDS..... Inspiring new ways…..