Picture: THINKSTOCK
Picture: THINKSTOCK

THE producers of strategic minerals should be required to allocate a fixed percentage of at least 20% of their total output for local beneficiation, say African National Congress (ANC) and Economic Freedom Fighters (EFF) MPs.

This percentage should increase incrementally over time, they say.

The demand emerged during a debate in Parliament’s trade and industry committee on Friday and goes further than the proposal of the Minerals and Petroleum Resources Development Amendment Bill which leaves the percentage to ministerial discretion. The committee does not oversee mining but has an interest in beneficiation and expansion of the manufacturing sector .

While the committee’s final report on the budget for the Department of Trade and Industry did not include a specific percentage , the demands of ANC and EFF members highlight the growing frustration among politicians with the country’s continued status as a commodity exporter rather than one of manufactured or processed goods.

There is growing pressure for mining companies to play a greater role in industrialisation . The department is also pushing for the modification of import-parity pricing by steel maker ArcelorMittal and petrochemical firm Sasol, which it sees as a binding constraint on the expansion of the manufacturing sector.

The bill, which has been adopted by Parliament and which is under review by Mineral Resources Minister Ngoako Ramatlhodi makes provision for the minister to designate certain minerals as strategic and to reserve part of their output for beneficiation.

Miners are strongly opposed to the designation clauses of the bill, warning that these could deter investment in the sector. The mineral resources department has also previously mooted a levy on all raw mineral exports from South Africa in order to encourage beneficiation.

Committee chairwoman Joanmariae Fubbs emphasised that the commodity boom was over and that "beneficiation is going to be the name of the game". She bemoaned the fact that the Minerals and Petroleum Resources Development Act had not been implemented.

She pointed out that it was difficult to beneficiate if the price of the commodity was not affordable for local manufacturers, and urged that minerals be made available at "developmental" prices.

The EFF ’s Floyd Shivambu suggested the committee recommend a minimum of 50% set aside for local beneficiation, but eventually agreed with the ANC’s Bongani Mkongi that the minimum be set at 20% and that mineral producers be required to increase this incrementally.

Democratic Alliance MPs opposed the move.