While the South African government has aggressively advocated for the domestic beneficiation of locally mined minerals in recent years, stakeholders will be required to first implement “innovative solutions” to inherent domestic challenges before this can be achieved, consultancy Frost & Sullivan programme manager James Maposa has asserted.

Maposa, who heads up the firm’s industrial automation, mining and manufacturing division, stated in a market insight paper that, while beneficiation stood out as the next “economic frontier”, major obstacles included imminent energy shortages, skills shortages and the identification and access of markets for locally beneficiated products.

Beneficiation infrastructure constraints and raw material access risks have also emerged as obstacles to the establishment of a thriving beneficiation industry.

The shortage of reliable power will most heavily impact on the first three stages of mineral beneficiation, which involves the smelting, moulding and resmelting of the extracted mineral commodities, and which renders the practice hugely energy intensive.

Maposa said that, while power utility Eskom expected to increase electricity supply by 2016, potential beneficiation investors were unsure as to whether the added capacity would be enough to support the establishment and development of a local mineral beneficiation sector.

“Cogeneration is a factor that potential beneficiation investors will have to explore to ensure electricity supply security over the short- and medium-term,” he noted.

Adding that mineral beneficiation was a technology-driven industry, Maposa stated that signi- ficant investment in the develop- ment of innovative capital equipment that would lead to lower costs would also be required.

“Lower-cost production allows companies to maintain a price-competitive advantage in a global market. South Africa’s exposure to research and development for the mineral beneficiation sector is limited and puts the country’s beneficiation drive on the back foot.

“South Africa should engage all relevant stakeholders to establish a mineral beneficiation research and development policy and fund, enabling the country to develop in-country research and development expertise on mineral beneficiation technologies,” he asserted.

Moreover, while beneficiation is expected to create significant employment opportunities, investment into skills development and education would be critical.

A failure to build the required talent pipeline would result in a rise in expatriate hiring from Europe, North America, China and India in the short- and medium-term.

“The success of establishing a local mineral beneficiation sector will depend on how well the nation is able to develop the required skills and talent pool,” he cautioned.

A further consideration of the envisaged beneficiation industry would be the identification of appropriate international target markets.

Maposa said that, as there would be limited regional demand for the beneficiation industry’s manufactured products, the country’s mineral beneficiation sector would need access to international markets.

“Unless the South African industry is able to supply its products at lower prices and at a higher quality than that of its Asian competitors, access to these international markets will be cumbersome,” he said.