Same laws, only different
Government’s DME prepared to think on its feet
GOVERNMENT WILL SHORTLY disclose empowerment credits mining firms can earn if they beneficiate metals. According to Sandile Nogxina, director-general at the minerals and energy department, the proposals are complete for SA’s gold and platinum sectors. Work on other commodities continues apace.
In essence, mining firms that encourage, say, jewellery fabrication may not have to meet the 26% equity sales as enshrined in the mining charter. “Mining firms claim Government is trying to make them jewellers,” says Nogxina. “But that’s not the case. We just need to show you helped encourage the growth of the downstream market.”
The proposals, that will act as modifications to the Diamond Act and the Precious Metals Act, will specify how encouraging local consumption of raw metals will convert into empowerment points. The only drawback is that different ratios will be applied to each commodity, which raises the prospect of another bun-fight between mining sectors. The pressure to change laws is partly coming from the mining industry itself.
The Chamber of Mines of SA last year said between R5bn and R10bn in fixed investment had been deferred owing to uncertainty about the laws. Much of this is foreign investment, and while foreign mining firms have hardly fled SA’s shores, Government is anxious to have items such as exploration expenditures improve on a scale seen in other commodity-rich countries.
It’s no coincidence, therefore, that the Government-owned Industrial Development Corporation (IDC) has pumped R60m into a little-known company, Kalagadi Manganese.
The ultimate aim is for Kalagadi Manganese to build a manganese mine and a R1,2bn smelter at Coega producing 350 000t/year of ferromanganese, a metal used in the production of steel and therefore of capital importance to China.
The total capital cost of the mine and smelter is R3bn and is an example of beneficiation- in- motion. Relatively cheap dirt mined in the Northern Cape, as Mintek’s president Paul Jordaan would have it, becomes more valuable metal in the Eastern Cape.
Kalagadi Manganese is a perfect demonstration of Government’s intentions. It’s another shot in the arm for Coega; and Kalagadi Manganese has a women’s grouping – Kalahari Resources – as its major shareholding. Not even widely felt fears of railway bottlenecks are interfering with a project that squarely meets political expedience.
Said Ufikile Khumalo, vice-president of the IDC’s industrial and utilities division: “The project fits perfectly within the IDC’s mandate.” About 600 jobs will be created at the mine; a further 400 will be employed at Coega.
Kalagadi Manganese fits the IDC’s mandate. Ufikile Khumalo