Mineral Beneficiation has become one of the major drivers in advancing the empowerment of historically disadvantaged communities in South Africa. It also presents opportunities for development of new entrepreneurs in large and small mining industries.
What is mineral beneficiation?
Beneficiation, or value-added processing, 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 involves a range of different activities including:
Each successive level of processing permits the product to be sold at a higher price than the previous intermediate product or original raw material and adds value at each stage.
Mineral beneficiation in South Africa
The concept of beneficiation is not new in South Africa, but it took major steps forward during the 1990s. During this period, the South African mining sector changed from being a predominantly primary commodity exporter to becoming a world exporter of processed minerals. South Africa, for example, produced 2.9Mt of ferrochrome (used in stainless steel production) in 2004 and accounted for 45 percent of world production of this alloy.
This transition resulted from the construction of a number of large-scale, resource-based investment projects such as Columbus Stainless, Hillside Aluminium, Namakwa Sands and Saldanha Steel, in addition to the continuing expansion of ferro-alloy production. This first stage of beneficiation, which is characterised by capital-intensive plants with low employment levels engaged in the production of mass intermediate products, now accounts for nearly 90 percent of the total minerals revenue with the other 10 percent coming from entirely beneficiated minerals.
Despite these developments, South Africa still has the potential to further raise the level of beneficiated mineral output, particularly in the production of finished goods.
The government has committed to the promotion of local beneficiation through legislation. The Mineral and Petroleum Resources Development Act of 2002, Act 26 of 2002 includes provisions that will ensure that (1) the Minister of Mineral Resources promotes the beneficiation of Minerals in the Republic. (2) If the Minister, acting on advice of the Board and after consultation with the Minister of Trade and Industry, finds that a particular mineral can be beneficiated economically in the Republic, the Minister may promote such beneficiation subject to such terms and conditions as the Minister may determine. (3) Any person who intends to beneficiate any mineral mined in the Republic outside the Republic may only do so after written notice and in consultation with the Minister.
The South African Mining Charter of 2004 specifically stipulates that mining companies will be able to offset the value of the level of beneficiation achieved by the company against its HDSA ownership commitments.
The Diamonds Amendment Acts, 2005 (Act No. 29 of 2005 and Act No. 30 of 2005) and the Diamonds Second Amendment Act 2005, Act 30 of 2005 The rationale for the amendment of the Diamonds Act, 1986 (Act No.56 of 1986) was to: increase access to rough diamonds for jewellery manufacturing in South Africa; maintain security of supply of rough diamonds; promote the beneficiation industry in South Africa thus creating jobs; and increase participation throughout the diamond value chain.
Precious Metals Act 2005, Act No.37 of 2005: The objective this Act is to provide for acquisition, possession, smelting, refining, beneficiation, use and disposal of precious metals. Precious metals include gold and the platinum group metals (PGMs). Silver has been excluded from the definition of precious metals.
Production and sales figures - 2007/8
Export revenue comprised 76,1 percent of total sales of these processed minerals in 2007. Total sales revenue increased by 26,3 percent of the total sales revenue of R54,8 billion. The biggest contributors to processed mineral sales were classified commodities (51,2 percent) which are lead by aluminium to a large extent, followed by chromium alloys (31,9 percent). Total production of processed minerals increased by 7,3 percent to 8,8 Mt in 2007. The value of local sales of processed mineral products increased by 13,9 percent, from R11,5 billion in 2006 to R13,1 billion in 2007.
Three provinces, KwaZulu-Natal, Mpumalanga and North West contributed about 85 percent of the total processed minerals sales revenue in 2007. Aluminium and titanium slag dominated the KwaZulu-Natal contribution, while more three quarters of Mpumalanga's total sales revenue was derived from chromium alloys and almost he entire North West’s total processed mineral sales revenue was derived from the chromium alloys and vanadium. These three provinces dominated the export sales revenue, with respective combined contributions of 85,6 percent. Chief contributors to local sales revenue were KwaZulu Natal, Gauteng and Mpumalanga, together aggregating 94,7 percent.
SOUTH AFRICA’S PRODUCTION, LOCAL AND EXPORT SALES OF SELECTED
PROCESSED MINERAL PRODUCTS, 2007
Table 10 of SAMI 2007/8
Beneficiation Economics Directorate
South Africa is in the process of promoting the export of value added products and therefore, simultaneously reducing the export of raw and intermediate mineral products. The initiative of raising the level of the country’s mineral processing status is thus highly significant, strongly supported by the establishment of the Beneficiation Economics Directorate in 2005, which consists of the Beneficiation Business Development and Beneficiation Strategy Development units, within the Department of Minerals and Energy.Beneficiation Business Development unit provides assistance to Small, Micro and Medium Enterprises (SMME) in the beneficiation sector through business development services; business linkages; feasibility and market studies.
The Beneficiation Business Development is also involved in the following activities:
The beneficiation strategy provides a framework that seeks to translate the country’s sheer comparative advantage inherited from mineral resources endowment to a national competitive advantage. The strategy is aligned to a national industrialisation programme, which seeks to enhance the quantity and quality of exports, promote creation of decent employment and diversification of the economy, including promotion of the green economy. Further, the strategy is contributory towards strengthening of the knowledge economy in support of the overall competitiveness of the economy.
The strategy presents an intervention that advances the developmental agenda of government. This strategy is anchored on a range of legislations and policies such as the Minerals and Mining Policy for South Africa (1998). It will also advance the objectives of the Minerals and Petroleum Resources Development Act (MPRDA), the Broad-Based Socio Economic Empowerment Charter (BBSEE), the Precious Metals Act, the Diamonds Amendment Act, energy growth plan as well as compliance with environmental protocols.
The strategy identifies several instruments that constitute an enabling environment for beneficiation (policies, legislation, incentives etc.). Furthermore, it illuminates prevailing constraints to the effective implementation of beneficiation that require an integrated approach to mitigate. These include, albeit not limited to access to raw materials at developmental prices, infrastructure (access, costs and logistics), limited innovation and more broadly R&D and shortage of required critical skills. Synchronously, the strategy recommends a set of integrated solutions to mitigate identified binding constraints and leverage on existing national processes, such as the New Growth Path and the national infrastructure programme.
The strategy outlines ten strategic mineral commodities, from which five value chains are selected. The value chains specified herein are intended to indicate the inherent value for South Africa in embracing beneficiation for all strategic mineral commodities. The strategy is therefore, not a blueprint for individual commodity value chains, but provides a framework within which value chain specific interventions will be anchored.
African Mining Partnership (AMP)
The Beneficiation Economics Directorate is participating in the African Mining Partnership activities, whereby the Beneficiation directorate forms part of the working group of 12 countries, which are South Africa being the project leader, Mali, Ghana, Tanzania, Madagascar, DRC, Angola, Namibia, Egypt Zimbabwe, Nigeria and Senegal. These countries focus on the development of the Mineral Beneficiation Framework for Africa. The Framework has been developed and presented to the AMP member countries by South Africa at AMP Plenary Meeting on the 3rd February 2009. The working group is awaiting the comments from other AMP member countries before approval.