[miningmx.com] — MINING countries do not beneficiate their own minerals, according to Chamber of Mines president Xolani Mkhwanazi.
“South Africans needs to be educated about beneficiation’, Mkhwanazi said last week in an exclusive interview.
“Most mining countries do not beneficiate. Nor do most of them serve as markets for their own mines’ production. Australia does not beneficiate. Canada does not beneficiate. Chile does not beneficiate.
“One has to process mining products close to their markets, such as Europe and Asia,’ said Mkhwanazi, who also chairs BHP Billiton South Africa.
This view is diametrically in contrast with government’s new economic growth plan, in which beneficiation of primary mineral products is declared a central policy target for the mining industry.
Together with this policy, the plan refers to a possible export duty on exports of unprocessed minerals. But, according to Mkhwanazi, there is little support from government for export levies.
He said an emphasis on beneficiation was misplaced. The shortage of electricity in South Africa left the country in no position to beneficiate.
Last year, in the run-up to the review of the Mining Charter, there was considerable rapprochement between government and the mining industry.
The new charter, which was announced in September, dealt with many of the industry’s concerns.
But one unfinished matter remains the beneficiation strategy, which is believed to be currently receiving cabinet’s attention.
In April Sandile Nogxina, the director-general of the department of mineral resources, told parliament that consultation between state economic departments on the strategy was at an advanced stage.
However, the new charter makes no mention of mandatory beneficiation. Instead, mining companies are given the chance to assign up to 11 percentage points of the charter’s empowerment scorecard to beneficiation.
Mkhwanazi said agreement had been reached with government on South Africa’s need for a beneficiation strategy. This did not imply an obligation on mining houses to beneficiate, but rather that they should facilitate it.
The good thing, he said, was that it was no longer a question of beneficiate or be penalised.
The chamber’s concerns about the new charter included terms that had drawn less attention. For instance, the prescribed housing standards were problematic, said Mkhwanazi.
The target is to replace all mining hostels with family dwelling units or at least a room for every mineworker. The deadline for this has been extended by a year to March 2015.
Some companies cannot meet this target – especially the gold and platinum sectors, which employ the lion’s share of mineworkers, he said. While platinum mines might have the funds to do so in the long run, this could shorten the lives of gold mines.
Some gold mines have a life expectancy of only seven years. If the housing standard is enforced, these mine would simply close by 2015. Instead, the approach should be pragmatic, permitting them to create jobs and pay tax a little longer, Mkhwanazi said.
– Sake24
