JOHANNESBURG (miningweekly.com) – Globally rated metals & mining analyst and portfolio manager Shamim Mansoor is urging government and mining companies to get on with it – together – to add value through downstream beneficiation to South Africa’s metals and minerals, for the betterment of the South African people, who are sitting on critical minerals required globally. (Also watch attached Creamer Media video.)

From her consultancy that specialises in metals and mining, Mansoor is encouraging value addition that extends as close as possible to the point of production, "to put an end to the export of wealth from communities that are in dire need of it".

For as long as these minerals continue to be exported as raw material, the ability of a country to contribute to economic expansion and diversification will remain limited.

At the top end, Mansoor quotes the Mapungubwe Institute for Strategic Reflection (Mistra) as calculating that South Africa has a colossal 92% of the world's platinum group metal (PGM) reserves for the green hydrogen economy, which European Commission President Ursula von der Leyen has also highlighted.

While South Africa is poised to play a major green economy role globally, she emphasised the need for this country to act strategically in developing infrastructure and downstream activity.

It must also be noted that important value addition can take place at many different levels, for example, at the level that it is being done by the Johannesburg Stock Exchange-listed Mantengu Mining through the purchase out of liquidation for R18.97-million of Masorini Iron Beneficiation’s (MIB’s) iron beneficiation plant in Phalaborwa, Limpopo.

Mining Weekly: What exactly does beneficiation mean?

Mansoor: It simply means adding value to the mined ore and then selling the beneficiated product at a higher price, instead of just selling the ore at a lower price. So, it commands a higher price. It increases revenue for mining companies. It adds to the country's GDP, and it creates much needed jobs in South Africa. So, in my view, the development of downstream industries is crucial to maximising the value of South Africa's mineral resources and creating those long-term economic opportunities. Look at China. It's monopolised its downstream activities. We do have beneficiation currently in South Africa. We've got the likes of Merafe beneficiating chrome ore into ferrochrome. We've got MMC beneficiating manganese ore into battery grade manganese, and more recently, we've had the junior miner Mantengu Mining purchasing MIB’s iron beneficiation plant, which converts super-fine ore into high-grade metallic products. It is being done, but on a small scale, and we need to increase that in South Africa.

How is beneficiation important for Africa?

At the recent Investing in African Mining Indaba in Cape Town, in the opening address, they said that one-third of the world's resources is in Africa, so beneficiation of African metals and minerals in Africa, for the betterment of Africa, should be the goal, and African countries host the vast amounts of the critical minerals required globally. According to Mistra, South Africa has got 92% of the world's PGM reserves for the green hydrogen economy. DRC has 56% of the world's cobalt reserves for electric vehicles. Gabon, South Africa, Ghana, Côte d'Ivoire have 54% of manganese. Thirty-six per cent of the chrome in the world is in South Africa, and Guinea has 24% of the world's bauxite. But most of these minerals are being exported as raw materials, which limits the exporting country's ability to contribute to the expansion and diversification of economies. In my opinion, your beneficiation must extend as close as possible to the point of production, so that the continent of Africa can put an end to the export of wealth from communities that are in dire need of it. Historically, Africa has focused the bulk of its efforts on activities such as exploration and mining, while there's been less investment and attention in beneficiation and manufacturing of products here, using African minerals, and we've now seen this starting to take effect, where we've got countries like DRC, Namibia, Zimbabwe, and even Indonesia, introducing export bans on raw ores to push for more in-country mineral processing.

What role does government play in beneficiation?

Well, that's a very important question. In South Africa's case, we’re poised for a major role in green development, the green economy globally, but we have to act strategically and develop the infrastructure and the downstream activities, and this is where the government comes in. At the Mining Indaba, our Minerals and Petroleum Resources Minister Gwede Mantashe mentioned that government is considering sustaining commodity-linked tariffs, consolidating incentives, and other existing financial instruments, to encourage beneficiation. In my view, in order to encourage mining companies to beneficiate, first and foremost, the government needs to provide a reliable and affordable power supply, working road and rail infrastructure, an efficient mining cadastral system, and tax incentives. Without these, the mining companies are crippled, so even if they do invest in beneficiation, it'll fall through when it comes to the infrastructure, the road and rail, the power, cadastral system, tax incentives. It's got to be a hand-in-hand approach between government and mining companies. But the framework in which this has to operate is government's role to implement ASAP, for beneficiation to succeed in South Africa.

MORE IN-COUNTRY MINERAL PROCESSING

On the value-addition front, South Africa has extensively tested highly convincing home-grown smelting technology that has the potential to re-establish this country as a global ferroalloys hub by enabling it to produce quality, low-cost ferrochrome, ferromanganese, and even some forms of steel.

Interestingly, African Rainbow Minerals and Glencore Operations South Africa are going all out to prove that this new SmeltDirect technology can be commercialised.

When retrofitted to existing smelters, SmeltDirect lowers the electricity requirement substantially, reduces costs to a level that could invite the competitive recommissioning of many of South Africa’s idled ferroalloy smelters, and opens the way for considerably greater environmental protection by driving down carbon emission.

Capital cost hinges largely on the production volume required, with work done putting capital at from $175-million to $180-million for a capacity of 200 000 t/y, much less than the cost of establishing a new greenfield plant.

Because far less electricity is required, renewable sun and wind energy can be applied to substantially lower carbon emission.

For decades, with its large endowments, South Africa added value to chrome ore and manganese ore, ahead of Eskom’s electricity price surge resulting in smelting furnaces having to be put on care and maintenance.

Now there’s a chance of South Africa returning to being a substantial value-added exporter of good quality, low-cost ferrochrome, ferromanganese, and even some forms of steel.