Minerals Council to engage dtic on beneficiation element of new industrial development strategy
Industry organisation the Minerals Council South Africa says it will engage the government on its Industrial Development Strategy 2026 released by the Department of Trade, Industry and Competition (dtic) on June 8, with the council noting “with regret” certain statements contained in the strategy.
The strategy includes proposals on a tax and quotas on chrome ore exports, as well as linking conditions regarding beneficiation to the issuance of mining rights.
The council says it will study the strategy before engaging the government on its contents.
“It is an unfortunate policy intention from the dtic, which, while not yet a law, adds to the incessant policy uncertainty that is constraining investment and growth of the mining industry and the economy,” says Minerals Council CEO Mzila Mthenjane.
The proposal regarding the issuance of mining rights with “conditions that must facilitate beneficiation” could potentially damage future investments in exploration and mining, the council posits.
It says it is engaged in talks with the Department of Mineral and Petroleum Resources about the contents of the Mineral Resources Development Bill to ensure mining laws make South Africa a globally competitive exploration and mining jurisdiction, attracting investment, growth and creating job opportunities.
“Mining and beneficiation are separate and distinct economic sectors in the mineral value chain. Beneficiation cannot, and must not, be imposed on mining because beneficiation forms part of manufacturing and overall industrialisation.
“As such, specific measures must be introduced to incentivise and attract investments to stimulate industrialisation and the diversification of our economy,” says Mthenjane.
The council reiterates that the supply of chrome ore for South Africa’s ferrochrome industry is not the reason for the reduced level of smelting of the key ingredient for stainless steel production.
Rather, it states that electricity tariff increases of more than 900% since 2008 have made South Africa’s ferroalloys industry globally uncompetitive, resulting in unprofitable smelters being shut.
The council also attributes the de-industrialisation trajectory in part to unaffordable electricity costs.
“The reduction in electricity prices for Glencore Ferroalloys and Samancor to restart their smelters is a much-needed intervention and underscores the Minerals Council’s position that competitive electricity tariffs and not restrictions on chrome ore (or other mineral) exports will support the ferroalloys industry and future beneficiation and industrialisation,” it avers.