Johannesburg – The further processing of minerals (or
beneficiation) is so capital- and energy-intensive that it would take place at
the expense of job creation.
This view – which is diametrically opposed to other
government institutions' view that the beneficiation of minerals is essential
for creating jobs – is presented in the new National Development Plan by Trevor
Manuel’s Planning Commission.
Earlier this year the Department of Minerals and Energy
announced a national beneficiation strategy, and the ANC Youth League's calls
for nationalisation were also based on the premise that the processing of raw
materials from nationalised mines could create jobs.
But the commission is unconvinced that mining and the
beneficiation of extracted raw materials can be a major job creator.
According to the commission, the role of mining is primarily
to generate export earnings and it is only a modest potential creator of jobs.
In general the beneficiation of raw materials contributes
little to job creation, declares the development plan.
Much more attention needs to be given to the role the mining
sector can play in stimulating other industries.
Examples would be industries that provide the services and
goods used by mines.
These include, in particular, machinery, chemicals and engineering
services, which are closely associated with growth in mining and are more
labour-intensive than minerals processing.
Job creation in the mining sector can be expanded by using
local inputs as much as possible, as well as by providing these to
The plan is in keeping with the mining sector's view.
The development plan says that electricity supply is the
biggest stumbling block, as most beneficiation activities are highly
energy-intensive. Judging from the progress in building the Medupi power
station there is probably too little electricity for all the mining projects
envisaged, never mind plants to beneficiate their products.
The Human Sciences Research Council's Dr Miriam Altman.
Platinum and chrome ore offer opportunity
The National development plan does say that beneficiation
can improve the value of mineral exports.
Care needs to be taken to identify sophisticated
resource-based products which South Africa can manufacture.
This is especially the case for platinum and chrome ore, and
an export duty on these minerals has been proposed to retard the exporting of
these unprocessed raw materials.
Over this weekend the ANC’s National Executive Committee
will discuss proposals for an export duty on raw materials which will encourage
According to the development plan South Africa has a natural
monopoly on platinum and chrome, as well as manganese – an advantage that it
can better exploit into the future.
It has also been proposed that the country promote research
to find alternative uses for platinum, in particular.
This involves long-term intervention, which should have
occurred long ago in a country that dominates global production of the mineral.
An outspoken pressure group in the ferrochrome industry is
indeed asking for the suspension of chrome ore exports, and it would appear
that the National Development Plan is responding to this.
What mines need
The national development plan has remarkably little to say
Current plans and aims are largely supported and there is
mention that the sector lacks a foreseeable regulatory dispensation and reliable
electricity and rail infrastructure.
Private electricity generation of up to 2 500MW by the
mining groups is also supported, as well as these groups' investments in rail
Private electricity generation plants could, according to
the plan, be up and running by 2015.
There is agreement with view of the parliamentary portfolio
committee on mining that the mining charter places insufficient stress on
benefits to mining communities.
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