JOHANNESBURG (miningweekly.com) – Trade and Industry Minister Dr Rob Davies has re-emphasised government’s commitment to the creation of a viable local minerals beneficiation industry, saying the country could establish a competitive advantage in global markets by leveraging the fact that minerals “are in South Africa”.

“This [advantage] could ultimately reveal itself as some sort of price discount,” he stated during a post-budget media briefing earlier this week.

Davies’ comments came a day after he announced to Parliament during his Budget Vote speech that government would, this year, develop a Minerals Beneficiation Action Plan as a component of the Industrial Policy Action Plan (Ipap).

Elaborating on the plan, Davies told journalists that its mandate had arisen from the Medium-Term Strategic Framework, and would be based on the structure of the Ipap, into which it would eventually be integrated.

“It's a rolling three-year programme that will focus on actions that will be taken by different parts of government [to establish a local industry] and work that has already been done under the existing beneficiation strategy won’t be junked, it will feed into the plan,” he outlined.

As a result of prior research by the Department of Trade and Industry and the Department of Mineral Resources, five value chains – iron-ore and steel, titanium, platinum-group metals (PGMs), precious metals and inputs into mining – had been identified for prioritisation under government’s beneficiation strategy.

While Davies would not be drawn on the instruments to be deployed under the newly announced plan, he added that two yet-to-be established special economic zones (SEZs) would be centred around mineral beneficiation, particularly that of PGMs.

“This could see the manufacturing of jewellery, autocatalytic converters and, most notably, fuel cell technology for small power stations.

“A lot of preparatory and technical work has been done and we’ve identified a number of companies who will possibly become involved and benefit from the incentives of a SEZ,” he commented.

Davies had told Parliament on Tuesday that government did not have the luxury of debating whether or not to beneficiate its mineral wealth.

“I am not suggesting that beneficiation is easy; however, if we fail to decisively pursue beneficiation we will relegate the South African economy to a place at the bottom end of the globalisation of labour, with serious consequences for our ability to generate income and employment.

“Our economy will remain undiversified and will be beholden to international commodity markets,” he cautioned.