President Jacob Zuma’s Cabinet has finally given its approval to South Africa’s long-incubated beneficiation strategy, but with none of the fanfare of the ‘Diagnostics Overview’, released on the very same day by National Planning Commission (NPC) chairperson Minister Trevor Manuel and deputy chairperson Cyril Ramaphosa.

The low-key Cabinet talks of the beneficiation strategy leveraging long-term benefits from the country’s substantial mineral endowment, while the well-communicated NPC describes the prevailing resource-intensive nature of the South African economy as “unsustainable”.

The beneficiation strategy, developed under Mineral Resources Minister Susan Shabangu, centres on ten commodities and five value chains, and has no public involvement, while the 25-member NPC wants public participation prior to presenting its vision statement and final plan to Cabinet in November 2011.

While the Cabinet's beneficiation approval statement is laconic in the extreme, Mining Weekly understands that the ten selected commodities of the beneficiation strategy are gold, platinum, diamonds, iron-ore, chromium, manganese, vanadium, nickel and titanium, with coal and uranium bracketed together, and the five value chains are energy, steel and stainless steel, pigment production, autocatalyst and diesel particulate filters, and diamond processing and jewellery.

However, no mention is made of this in the NPC document, which warns of South Africa’s resource-intensive nature making the country vulnerable to external forces that can induce local booms and busts.

The NPC notes further that the coal-heavy nature of the economy opens it to penalties as the world seeks to mitigate climate change by reducing emissions of carbon dioxide.

It says that export earnings of the mining sector currently help to fund South Africa’s imports and create a large number of low-skilled jobs. Therefore, government and indus- try would need to look at innovative ways in which to support and transform the sector as it changes to a low-carbon future.

It adds that any additional jobs that might arise in “green” industries would also need to be set against the potential job losses in the mining industry, as more-expensive energy constrains the sector’s activities. Limited water resources will also obviate a business-as-usual growth trajectory.
The NPC makes no mention of the beneficiation strategy, which recognises sidestream beneficiation but emphasises downstream beneficiation, embracing activities ranging from energy- and capital-intensive smelting and refining to labour-intensive craft jewellery and metal fabrication.

The Cabinet’s beneficiation approval follows South Africa’s historic 2010 joint govern- ment, labour and business declaration, which recognised beneficiation as a means of translating South Africa’s comparative minerals advantage into a competitive advantage to fuel further industrialisation.

The tripartite declaration of 2010 included a joint commitment to add value in South Africa rather than export raw ore.

The joint declaration’s fifth commitment is to consider the establishment of a national beneficiation agency that is mandated to drive downstream, upstream and sidestream beneficiation as well as all mining-linked industries, and to enlist the support of strategic international partners to develop skills and to transfer technology.

“The new policy presents exciting opportunities for long-term investment for both local and foreign investors into the beneficiation and manufacturing sector of the South African economy.

“Beneficiation will leverage optimal benefit from the enhanced value of exports, increasing sources for consumption of local content, and contribute towards the creation of sustainable jobs,” the Cabinet says.

It is difficult to accept that news of Cabinet’s acceptance of the high-energy-demand beneficiation strategy and the NPC energy-warning diagnostics document were released on the same day by the same government.

Is this a question of expected minerals leverage actually exposing Cabinet cleavage?