26 February 2013

South Africa's Minerals


The Select Committee on Economic Development was briefed on Tuesday by the Department of Mineral Resources on mineral beneficiation in South Africa.

Briefing the Committee, the Deputy Director-General of ERc onomic Development Mr. Musa Mabuza said the beneficiation strategy's broad vision was to create space for new enterprise development which would present opportunities to create "decent" jobs and reduce poverty alleviation.

The mineral beneficiation strategy is informed by the White Paper of 1998 which outlines that the aim of the policy is 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.

The Chairperson of the Committee Mr Freddie Adams said the issue around beneficiation had been a hot topic in the past couple of years, "Communities and unions have been complaining that there have been no benefits to mining communities. The big companies come in and take the money.

"We need to know what the Department is doing in this regard, regarding control measures and policies that are in place", he added.

A Committee member Mr. Kenneth Sinclair from the Northern Cape said a policy issue needs to be undertaken by government wherein a strategic decision that states government is prepared to invest in specific areas like the Northern Cape. This would be similar to when the justification was made to build an aluminium smelter in Richards Bay.

Mr Sinclair said he regularly received complaints from communities in the Northern Cape that there was no beneficiation taking place in the Province whilst it was home to the biggest iron ore mine. "Wonderful reasons are always given as to why this cannot take place, one of which is the cost of electricity" he said.

Members of the Committee also questioned what impact rising electricity costs would have on the plan especially taking into consideration the application by Eskom to the National Energy Regulator of South Africa for a 16% tariff hike.

The Committee suggested to the department that whatever product was beneficiated, it should take place as close as possible to the source and the people, in order to address economic backwardness in the country.

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