Mining firms urged to endorse beneficiation
February 21, 2005
 By Lynda Loxton
Cape Town - Phumzile Mlambo-Ngcuka, the minerals and energy minister, is still keen on getting mining companies to boost the local beneficiation of raw minerals and metals, particularly into jewellery, but she does not expect them to commit financial suicide in the process.
Speaking at a parliamentary media briefing on Friday, Mlambo-Ngcuka, who has been described as being "overzealous" on the issue of beneficiation, said that direct quotas on mine output that had to beneficiated locally would only be introduced incrementally and according to South Africa's capacity to actually beneficiate gold, platinum and diamonds.
She admitted that mining firms had been rather ambivalent about attempts to get them involved in the increased beneficiation of minerals and metals, especially when some reports indicated that mines would be forced to make a certain percentage of their output available for local beneficiation or face export duties.
Mlambo-Ngcuka explained: "We are asking them to make raw material available in South Africa instead of exporting it 100 percent."
They could either support the revival of jewellery manufacturing centres around the country or encourage their overseas beneficiators to set up shop in South Africa, both of which would earn them credits in terms of the Precious Metals and Diamonds General
Amendment Bill due before parliament soon.
Mlambo-Ngcuka said some companies, such as AngloGold Ashanti, De Beers, Harmony and Anglo Platinum, had indicated that they would help to promote the increased local beneficiation of rough diamonds and precious metals, but she did not realistically expect all of them to get involved.
"What we have opened now is an opportunity for them to think [about it] and they are going to make the correct choices ... we would not expect them to be suicidal," she said.
Bloomberg reported that the Chamber of Mines, which represents most mining firms that operate in the country, attacked government plans for targets for the processing of precious metals and diamonds, and punitive taxes for firms that did not comply.
"The concept of mining companies being forced to pay an export tax if they do not beneficiate locally has not been discussed at all" in negotiations with the government, with the exception of a possible tax for diamond mining producers, Mzolisi Diliza, the chamber's chief executive, said at the weekend.
Low taxes, better infrastructure and investment in skills training would be a better way of promoting manufacturing, the chamber said.
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