Hon Minister, hon Deputy Minister, hon committee members, distinguished guests, I greet you all. Let me start by expressing my support for this Budget Vote and indicate that my topic for today is mineral beneficiation in South Africa.
If our country were to succeed in alleviating the many socioeconomic challenges we face today, those of high unemployment, poverty and many other social ills, the beneficiation of our raw materials would be the solution. The beneficiation of mineral resources is critical to the development of our economy, to employment creation and to generally improving the lives of ordinary people.
The ANC, at its 53rd congress in Mangaung, resolved that through economic transformation it intended to build an adequate society in which there was decent work for all. The past labour unrest in the mining sector, which has been marked by violence, loss of life, current lay-offs and job losses, is testament to the fact that South Africa remains an unequal society. This is a result of the historic apartheid spatial patterns that contributed to the migrant labour system, characterised by hostel dwelling, poor living conditions and an unskilled labour force.
Central to this year's state of the nation address, President Jacob Gedleyihlekisa Zuma affirmed that:
... on broader economic transformation, the revised Broad-Based Black Economic Empowerment Act and codes are finalised. The development of black-owned enterprises and black industrialists will be prioritised.
In the context of the mining sector, which is primary to beneficiation, there is a greater need to transform the structures of production and ownership in order to enhance the development of black-owned enterprises and black industrialists.
According to the Citibank Report of 2010, South Africa as a resource economy was estimated to possess approximately US$2,5 trillion in nonenergy mineral wealth, making it one of the wealthiest mining jurisdictions in the world. Despite this, South Africa continues to export most of its minerals as ore or semi-processed minerals rather than as high-value intermediate to finished products. There is significant opportunity lost to South Africa in this regard, and in fact South Africa has become a net importer of mineral products in value terms.
The mineral resources industry in South Africa has the potential to compete on a global scale. South Africa has a competitive advantage in mineral and metal resources. Not only does the country have a considerable portion of the world's known reserves of aluminium silicate, chromium, iron ore, gold, manganese, the platinum group of metals, vanadium and vermiculite, to mention but a few, but it is also rich in antimony, fluorspar, phosphate rock, titanium and zirconium. In 2004, mining contributed R87,1 billion, which is about US$13,5 billion or 71% to gross value added. This contribution increased by R2,9 billion from that of the previous year.
If various processed mineral products, such as ferroalloys, aluminium, carbon and stainless steel are included in this analysis, then the contribution of mineral resources to exports is much higher at over 35%. South Africa remains a resource-based exporter of largely unbeneficiated or partly processed primary materials and a net importer of manufactured goods. Certain products represent immediate opportunities, some examples being steel, screws, bolts, nuts, rivets, etc.
Toolmaking is a key supporting industry for mineral beneficiation and there is a national tooling initiative, which was formed after the tooling study was completed, to implement tooling training nationally.
The National Tooling Initiative, or NTI, is a public-private partnership, which is aimed at rehabilitating and growing the South African tool, die and mould-making industry. The South African tool, die and mould-making industry is anticipating that its intervention will increase turnover in the industry from R6 billion per annum to R20 billion by 2014.
Sihlalo, sidzinga kwakha tikhungo letinyenti tekucecesha lusha lwalapha eNingizimu Afrika kutsi lube ngema-Athizeni laneticu. Lomklamo webucwebe waseBhabtini-Emjindini usibonelo lesihle semklamo wekupolisha lodzinga kusekelwa nguhulumende. Awuniketi emandla nje kuphela kulolusha, kodvwa uphindze ulunikete lwati, buchwephesha kanye nesipiliyoni. (Translation of Siswati paragraph follows.)
[Chairperson, we need to build many institutions that will train the youth of South Africa to become qualified artisans. The jewellery project at Mjindini in Barberton is a good example of a beneficiation project that needs support from the government. It not only empowers the youth, but it also provides them with skills, expertise and experience.]
The beneficiation strategy identifies five pilot value chains as critical to addressing the nation's development priorities. Firstly, there are the autocatalysts, in terms of which the country's platinum group metals and significant portions of the country's stainless steel production are consumed. Then there is iron ore and steel, key elements in the development and industrialisation of countries. Lastly, there is energy that ensures the security of energy supply, which serves as the bedrock for development, pigment and titanium, as well as jewellery. In pursuit of an enabling regulatory environment to address the challenge of access, the Department of Mineral Resources has strengthened section 26 of the Mineral and Petroleum Resources Development Act to empower government to determine both requisite volumes and price for minerals to be sold for local mineral beneficiation. This will not only provide security of supply for manufacturers invested in South Africa, but will also make it attractive and cost-competitive for the establishment of such facilities in our country. Given that the most well developed beneficiators are established in traditional and emerging industrialised economies that commonly do not have minerals, the department believes that this proposition provides for a formidable partnership between the department and interested manufacturers, with both technical prowess and financial strength.
In conclusion, it would be important that manufacturing be more appropriately dealt with by entrepreneurs and companies with manufacturing skills. The promotion of the beneficiation Bill should be to create a regulatory environment in which incentives are offered to manufacturers so that they will be encouraged to invest in downstream activities in South Africa.
However, I want to point out that the mining companies' reservations concerning their involvement in downstream beneficiation must also come to the party. The sector must invest capital and find ways to promote beneficiation in minerals. Working together with the mining sector, we can go a long way in ensuring a better life for all our people.
Finally, we must heed the call by His Excellency, President Goodluck Ebele Jonathan of the Federal Republic of Nigeria, on his recent visit to Parliament when he urged all of us with the following words:
We must work together to put an end to the exploitation and exploration of Africa's resources for export without any value added.
In this regard, he continued:
African countries must transform from being primary sources of raw materials into producers to create jobs and opportunities for our people.
He added that:
We must check the loss of Africa's trained manpower to already developed countries; these are the very people we need to scale up our economies as well as improve our public and social services.
Thank you. [Applause.]