“Honourable House Chairperson,
On behalf of the ACDP, in our DTIC PC, I have been the most vocal advocate for ramping up beneficiation. What is beneficiation? It involves the transformation of a primary material (produced by mining and extraction processes) to a more finished product, which has a higher export sales value.
Beneficiation is a good policy of this government, but like most good policies, they fail at the start line of implementation. The beneficiation strategy of South Africa is aimed at providing a strategic focus for our minerals industry in terms of developing mineral value chains and facilitating the expansion of beneficiation initiatives in the country, up to the last stages of the value chain.
Downstream value addition involves a range of activities including large-scale capital-intensive activities such as smelting and refining as well as labour-intensive activities such as craft jewellery and metal fabrication such as machinery and equipment manufacture. Side stream refers to infrastructure (e.g. power, logistics etc.), research and development, human resource development and inputs such as capital goods, consumables and services. Here again, the ruling party fails at implementation. Our railway infrastructure is in a shambles, adding unnecessary costs to the mining sector.
South Africa has been a resource economy in excess of a century. An independent evaluation of South Africa’s non-energy in-situ mineral wealth is estimated at US$2.5 – 5 trillion, making the country the wealthiest mining jurisdiction. However, a considerable amount of South Africa’s mineral resources is exported as raw ores or only partially processed. Although South Africa has steadily improved its ratio of beneficiated to primary products exported since the 1970s, these ratios are still well below the potential suggested by the quality and quantity of its mineral resources endowment.
On behalf of the ACDP, I have called for a beneficiation index to be created, that can track the ratio of the quantity of raw materials exported, versus the quantity beneficiated. A failure to fully implement this index and the beneficiation policy, would be to pay lip service to a good policy, and to admit to creating jobs for our trade partners, while millions of South Africans languish in poverty and unemployment.
I thank you.”