South African Business 2016 edition

OVERVIEW Mineral

OVERVIEW Mineral beneficiation The successful beneficiation of our mining assets is integral to growing the economy Mineral beneficiation has been identified by the ruling African National Congress party as being key to transforming South Africa’s economic structure away from a colonialist framework to one that adds value to the lives of all citizens. The idea behind the Mineral and Petroleum Resources Development Act is to boost the minerals beneficiation sector, expected to increase employment levels and stimulate economic growth. The first ‘pilot commodity value chain’ has been developed by the National Department of Mineral Resources and applies to the iron and steel industry. Future value chain strategies will be developed for energy (coal, uranium), catalytic converters, jewellery and pigment production. Kalagadi Manganese is building the world’s biggest manganese sinter plant. The plant will produce 2.4 million tons of sinter-product. Of this, 700 000 tons will make its way to the Coega IDZ in the Eastern Cape where a new smelter is to be built. South Africa plans to exploit its rare metals and plans to develop a beneficiation complex at the West Coast port of Saldanha. Titanium sands are currently exported at a value of about R2 690 per ton but with beneficiation this could rise to R6 000. Steel production is under severe threat as a result of cheap imports. Steelmaking contributes more than 1.1% directly to South Africa’s gross domestic product (GDP), and a further 0.4% indirectly. South Africa’s biggest steel producer is Arcelor Mittal which has four large plants located at: Newcastle in KwaZulu-Natal, Vereeniging in Gauteng (long steel production), Vanderbijlpark in Gauteng and Saldanha in the Western Cape (flat steel). Vanderbijlpark makes about four-million tons of liquid steel, servicing about 78% of South Africa’s demand. There is also a coke and chemicals facility in Pretoria. BHP Billiton has two large aluminium smelters, Bayside and Hillside, with the former apparently being considered for closure. Tata Steel is the anchor client of the Richards Bay Industrial Development Zone (RBIDZ), with installed capacity to produce 150 000 tons of ferrochrome, mainly for markets in Europe and Japan. Hulamin is a leader in the sophisticated aluminium finishedproduct sector. SECTOR INSIGHT • Steel production is under severe threat from imports • Mineral beneficiation is expected to transform the economy SOUTH AFRICAN BUSINESS 2016 82

NEW MONDAY MORNING START: Conference and Exhibit Hall Open at 9am! IN AFRICA, SMART INVESTING & SMART MINING MEET HERE 2016 A Year of New Opportunities and Conference Enhancements The Mining Indaba team is reacting to the feedback we have received. 2016 will bring more structured and interactive content plus enhanced networking opportunities. MORE Customized networking and matchmaking Conference sessions and exhibition hours Mining executives presentations Investor-led discussions Access to the Investor Programme ENHANCED Different points of access based on matching interests Clearer structure to the sessions and opportunities for more interaction Hybrid format of stand-alone presentations and group conversation Market-themed panels and country case studies featuring multi-discipline perspectives Varying levels of investors are invited to apply Scan to visit the website SAVE £100 when you mention code PALM Mention the offer code “PALM” and earn £100 on the prevailing delegate rate when you register for the 2016 Investing in African Mining Indaba before 30 October 2015. Code must be mentioned at the time of registering. www.miningindaba.com