Modernising mining through partnerships and transformation
Mining is a critical industry for South Africa as the country works towards the achievement of the National Development Plan (NDP), which aims to eliminate poverty and reduce inequality by 2030. According to the NDP, the country can realise these goals by drawing on the energies of its people, growing an inclusive economy, building capabilities, enhancing the capacity of the state, and promoting leadership and partnerships throughout society.
To give effect to this vision, and to ensure that mining does not become a “sunset sector”, the Department of Science and Technology (DST) and the Department of Mineral Resources have partnered to launch the Mandela Mining Precinct (MMP).
The MMP is an outcome of the Mining Phakisa, which aims to foster global leadership in narrow-reef, hardrock mining equipment and systems through partnerships in research and development (R&D) and the creation of a competitive local manufacturing capability.
National Treasury, via the DST, has allocated R213 million in support of the implementation of the South African Mining Extraction Research, Development and Innovation Strategy, which the Council for Scientific and Industrial Research developed and has been tasked with leading.
Launched recently by the Minister of Science and Technology, Mmamoloko Kubayi-Ngubane, and the Minister of Mineral Resources, Gwede Mantashe, the MMP is a dedicated R&D hub located in Melville, Johannesburg. It has been set up to find solutions to the problems facing the mining sector, and to address the need for a vigorous, vibrant and adequately resourced local mining research, development and innovation community. The MMP will address not only the technical challenges but also the socio-economic imbalances in mining.
It was established as a partnership between government and the Minerals Council of South Africa, formerly the Chamber of Mines, and the launch was attended by captains of the mining industry, including Roger Baxter and Neal Froneman.
Also based at the MMP is the Mining Equipment Manufacturers of South Africa (MEMSA), which was launched simultaneously by the Department of Trade and Industry (dti). MEMSA aims to grow the local supply chain of capital equipment for the mining industry and will receive an R8 million sponsorship from the dti’s Cluster Development Programme.
The Minerals Council of South Africa has pledged R33 million for the 2018 calendar year, and will honour a funding commitment ratio of 1:2 against funding from government on an annual basis.
Partnerships vital for growth
Minister Mantashe told guests at the launch that partnerships are vital for growth in the sector. Partnerships, he stressed, requires mutual respect “and an appreciation that we need each other and are better together. Partnership is a conscious exercise; if you don’t do it consciously, it doesn’t work”.
The Minister said that over the past few decades the mining sector has experienced huge challenges, with its contribution to the country’s gross domestic product (GDP) declining dramatically, from 21 percent in 1970 to 7.4 percent in 2017. “We are in discussions with industry, with the aim of improving our contribution to the GDP. We must strengthen it, modernise and grow the industry.”
Minister Mantashe added that mining has to be treated with respect. He said the common expression in the sector is, “if it is not grown, it is mined” and current and future technology will depend on what is mined.
Referring to the MEMSA exhibition that accompanied the launch, the Minister urged mining companies to source their equipment from the local companies that were exhibiting, as they were producing better equipment than their global counterparts. While jobs are being shed in mining, the Minister added, more jobs could be created in associated sectors, such as the mining equipment manufacturing sector.
About US$2 billion worth of mining capital equipment is imported into South Africa annually, with the Southern African Development Community representing another US$2 billion annual market, translating into a niche market larger than that of the European Union. This represents an enormous opportunity for MEMSA to leverage in terms of import displacement.
The MMP is in line with South Africa’s commitment to increasing its investment in research and development. This currently stands at 0.77 percent of GDP, and the aim is to increase it to 1.5 percent. This can only happen if the country has practical programmes in place, and the MMP is one of these.
Minister Kubayi-Ngubane said the MMP is a good illustration of public-private partnerships in action. “We are setting an example, showing that, working together, we can place our country and our people on a higher developmental trajectory.”
The MMP and the activities associated with it represent a new dawn for collaboration in mining research, development and innovation. All stakeholders – including government, mining companies, local mining equipment manufacturers and the research community – acknowledge the need for a coherent, collaborative approach to ensure the long-term sustainability of the sector. It is hoped that this partnership will stimulate the transformation of South Africa's comparative advantage in the minerals sector into a competitive one.
Modernisation of mining
“The modernisation of mining, which includes mechanisation and automation, is said to bring opportunities that outweigh the projected challenges, and is therefore deemed necessary,” Minister Kubayi-Ngubane said.
“This conversion will broadly contribute towards the survival of the South African mining industry through the mining of lower-grade ores, as well as deeper resources, thereby extending the life of mines. In addition, the adoption of technological developments and advancements will contribute towards improved health and safety, and facilitate the sector’s migration from dangerous, labour-intensive platforms to the government’s goal of zero harm,” the Minister said.
Also speaking at the launch, MEMSA CEO Dr Paul Jourdan said that MEMSA is focusing on rolling out programmes to support its members’ growth, technology development and competitiveness.
“Our short-term goal is to increase local content, which will ultimately require a dedicated incentive, especially with regard to capex. This means we also have to increase factory-floor and manufacturing competitiveness, and look at innovation, technology, quality and pricing,” Jourdan said.
He added that the focus on capital equipment is essential to usher in a new age of mechanisation in South Africa’s mining industry, as the old model of using cheap migrant labour is no longer sustainable.
Contrary to the popular view that mechanisation will result in significant job losses in the mining industry, research indicates that it will generate additional employment opportunities.
“Mechanisation based on locally manufactured equipment has the potential to maintain employment levels,” Dr Jourdan said. “For example, if you install a completely mechanised equipment set, from drifter drills to roof bolters and load-haul dumpers, which can all even be controlled remotely, you will employ nearly the same number of people,” he added.