South Africa is known for its rich mineral deposits, mainly underpinned on precious stones, diamonds and gold.
But over the years, the country has failed to capitalise on this natural endowment to create a thriving jewellery manufacturing sector.
Should the Department of Trade, Industry, and Competition’s strategy be successful, however, this will soon change.
The department’s strategy is aggressively pushing for the manufacturing of minerals mined in South Africa into products for global consumption.
This will be done through the jewellery manufacturing precinct, a special economic zone located in the OR Tambo district in the Eastern Cape.
“The plan is to support South Africa’s mineral beneficiation strategy,” said Zuko Godlimpi, the department’s deputy minister.
“The jewellery manufacturing precinct strategy seeks to enhance the manufacturing of minerals mined in our own country.”
Major supplier of raw materials
Godlimpi expanded that South Africa continues to be a major supplier of raw materials to the global market.
He said the minerals strategy, among others, seeks to enhance the jewellery manufacturing industry to derive more value from the country’s minerals.
“The strategy also aims to place the industry in a position where it can compete with the world’s advanced companies in the same field,” he said.
According to the department, the full development of the jewellery manufacturing precinct provides export-focused investors at the precinct access to incentive packages as part of the national special economic zones programme.
Godlimpi said the department has contributed R507-million for top-structure development through the special economic zones fund.
“The zone currently has seven operational investors. An additional eight companies are busy with factory fitment processes and will be in operation before the end of the financial year.
“Furthermore, over R1-billion investment commitments has been secured for OR Tambo SEZ [special economic zone] Precinct One,” said Godlimpi.
Wealthiest mining jurisdiction
A Wits University study analysing the key factors affecting beneficiation in South Africa has noted that the country has the wealthiest mining jurisdiction in the world, with mineral resources valued at $2.5-trillion (R44.6-trillion).
“Despite these assets, the level of value-added mineral beneficiation undertaken in South Africa is low, with activities in the mining industry dominated by primary production and exports of raw or partially processed minerals,” notes the research paper.
Beneficiation or value-added processing involves the transformation of the raw material through the production process using local resources to a more finished product that has a higher value than the raw material for the export market.
Mineral Resources Minister Gwede Mantashe said the government should impose tax on primary mineral exports while providing an incentive scheme for beneficiation processes.
The Minerals Council favours a “carrot” as opposed to a “stick” approach to achieving higher levels of mineral beneficiation in South Africa.
Said the council: “This would entail removing the binding constraints that have curtailed mineral beneficiation since the onset of the electricity crisis more than a decade ago, while at the same time creating a more conducive policy environment for primary mineral extraction.”
