It is widely accepted that South Africa has substantial remaining resources of unexploited industrial minerals. In fact, the newly released Industrial Policy Action Plan 2013/14 concurs with estimates of there being remaining mineral reserves and resources worth more than $2.5-trillion.

That said, the country’s metal casting and tooling industries, which operate downstream of this resources treasure trove, are struggling to remain competitive, with the foundry industry having also emerged as one of the most vulnerable industrial subsectors to rising electricity tariffs.

A recent survey of 40 foundries conducted by the National Foundry Technology Network (NFTN) shows that 1 132 jobs have already been lost as a result of material Eskom power price increases since 2007, which, in many cases, have been compounded by municipal mark-ups of up to 700%.

Eskom has also secured above-inflation increases for the coming five-year period, albeit at a rate that is half the 16% a year that had been sought between 2013 and 2018. In addition, concerns remain about the prospect for municipal price increases.

For this reason, energy efficiency emerged as a major theme of the inaugural Metal Casting Conference (MCC), which was held in March, in the North West province.

The delegates learned that the challenges faced by foundries in South Africa are not unique in a global context and that even their far larger Brazilian, Russian, Indian and Chinese counterparts in the ‘Brics’ bloc were confronting similar concerns.

In fact, NFTN project leader Adrie El-Mohamadi has argued that Brics countries share several issues besides energy efficiency.

The future of the industry across Brics countries will hinge on the ability of foundry owners to pay closer attention to the needs of customers and the issues of material efficiency and waste management.

Specific Challenges
Nevertheless, South African foundries also face some distinctive challenges.

It was noted at the recent Brics summit, in Durban, that not only do South African foundries pay significantly more for electricity and raw materials than their Brics counterparts, but their labour costs, in relation to productivity, are also a cause for concern among foundries in the other Brics countries.

The MCC’s aim was to discuss the way in which the global metal casting market is changing and how the Brics countries could play a role in shaping foundry markets with regard to the challenges of energy consumption and costs, waste management and labour and raw-material costs.

American Foundry Society director of marketing, communication and public relations Alfred Spada confirmed that China had emerged as the largest metal casting producer, but the worldwide trends indicated that most countries are leaning towards greater localisation across the foundry market.

One of the industry’s strengths, Spada argues, is that there are many variables in the metal casting process, which offers scope for the industry to respond to specific customer demands. This also enables local metal casters the opportunity to offer tailored solutions that improve their clients’ manufacturing processes, efficiencies and costs.

Mesopartner process facili- tator and partner Dr Shawn Cunningham, who works with the NFTN to promote competitiveness and technology upgrades in the foundry industry, adds that many local manufacturers are specifically looking to localise in order to align their businesses with the Preferential Procurement Act and the procurement demands of State-owned companies, such as Eskom and Transnet. This is requiring investment in new technology and new partner- ships between foundries, their customers and universities.

Foundries can, thus, tap into this opportunity by focusing on their clients’ need to localise.

In addition, they can further integrate themselves into these supply chains by applying research and front-end engineering to reduce the weight of their castings and develop products that are designed for manufacturers at competitive prices.

World Foundry Organisation general secretary Andrew Turner adds that continuity of supply is another critical issue for foundries. Foundries need to ensure successful supply chain management as it depends on adaptive models, efficient costing models, excellent execution of supply, the ability to anticipate and mitigate risk, as well as the ability of foundries to recognise, manage and profit from change.

Energy Efficiency
Another critical competitiveness driver will be the integration of energy efficient technologies and solutions.

The metal casting industry is one of the most energy-intensive manufacturing sectors, with the melting process accounting for 55% of its energy consumption.

Notwithstanding the high energy-related costs, however, the domestic industry continues to use melting technologies with poor energy efficiency.

Therefore, energy efficiency in foundries is necessary as electricity prices continue to escalate in South Africa.

Environmental & Sustainability Solutions executive director Seakle Godschalk argues that greater energy efficiencies could be achieved through material efficiency by implementing material flow cost accounting (MFCA).

MFCA is a tool for quantifying the flows and stocks of materials in processes or production lines in the physical and monetary units.

It originated in Germany and evolved from the ecobalance concept. It was formalised in ISO 14051 and is being adopted in South Africa as a national standard.

The tool assists in developing an integrated approach to improve material and energy efficiency in the supply chain.

Foundries are inherently dirty and energy-intensive facilities, use a variety of natural resources and emit carbon emissions. The South African foundry industry face material efficiency challenges and increasing energy prices that make the country’s foundries less competitive in the worldwide market.

Inductotherm Corporation sales manager Robert Keshecki explained the importance of electricity-consumption management by understanding the complete rate structure and how equipment operates within that structure, which is done through improving the operation’s existing and new equipment, given the rate structure, as well as maintenance to increase efficiency.

Foundries must monitor the energy consumption of capital equipment, the operating procedures and maintenance procedures, he noted.

“Operating procedures include melting at lower-peak power levels, melting less frequently but during more hours at a time and melting at off-peak power levels.”

Waste Management
Metal casting waste products include moulding sand, core sand, slag, baghouse dust, furnace refractory, broken cores, shot-blast fines and graphite electrodes, most of which end up in a dumpsite and are not reused.

Beneficial use is any further use after the original use of a discarded material or by-prod- uct, which would otherwise have become waste. Its advantages include the conservation of raw materials and energy; the minimisation of pollution in soil, water and air resources; turning waste into a valuable resource; reducing disposal costs; as well as improving the competitiveness of a foundry.

Waste foundry sands, which often cost more to dispose of than to beneficiate, constitute the largest amount of waste in the foundry industry and can be beneficiated through its use in the production of asphalt, concrete, construction fill, flowable fill, grouts and mortars, highway embankments, landfill liners and covers, paver stones and bricks, pipe bedding, potting and speciality soils for agriculture and horticulture, as well as road bases.

“Foundries need to prepare the waste sand as raw material according to client specifications,” said Brazilian Foundry Association engineer and environment director Fabio Garcia Filho.

The solution, he explained, was to create legal conditions that would allow for the reuse of waste material, ensure that client material specifications were met and get the support of environmental control departments to help demonstrate the economical, social and environmental benefits of reused sand.

Scrap Security
Another development being closely monitored by metal casters is an initiative by the Depart- ment of Trade and Industry (DTI) to try to shore up the supply of competitively priced scrap metal through a system that restricts the export of ferrous and nonferrous scrap metal.

The mechanism that has been proposed stipulates that domestic consumers be given first right of refusal and preferential prices and is being supported by the South African Institute of Foundrymen.

Government believes the instrument being proposed, which includes the introduction of a price preference system, will strengthen current export control measures and safeguard the supply of affordable scrap metal.

The DTI believes that the intervention – together with the security of demand that could be offered by the big infrastructure programme and the competitiveness upgrading support on offer through various incentive programmes – could help transform a sector currently considered to be in a sunset phase into one that could contribute sustainably to economic growth and job creation.