paul jourdan, msc conference , nasrec, may 2019...2019/06/10 · [1] table 3.4.10 of “national...
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Paul Jourdan, MSC Conference , Nasrec, May 2019
The AMV: Realisation of the Mineral Linkages
REGIONAL ECONOMY
socio-enviro-political context
Consumption (induced) Linkages
Knowledge Linkages
HRD• Engineers &
scientists• Technicians• Operators, etc
RDI• Universities• R&D entities• Firm RDI, et al
Geo-knowledge
Systematic geo-survey & target development
RMCs
Fiscal Linkages• Levies, ground rents, • Duties/tariffs/excise• Royalties, dividends (equity)• CIT, RRT, WHT, PAYE, et al • SWFs, Stabilisation Funds, etc.
Jobs/wages (also in backward, forward, knowledge and infrastructure linkages)
EXPORTS to world economy (into GMVCs)
Intermediates
ManufactureRefiningSmelting
Mineral
ProcessingMINING
Mine
Developm’tExploration
Backward/upstream Linkages: Inputs into local/regional/global minerals sector
Capital Goods• Machinery• Equipment• Plant• Vehicles, • et al
Consumables• Explosives/caps• Grinding media• Wear parts, spares• Chemicals/reagents• Fuels & lubes, et al
Services• Drilling/exploration• Finance, ICT• Labour/skilling• Engineering/Analytical• Logistics, catering, et al
Other Inputs• Construction,• Utilities,• et al
Infrastructure Linkages (spatial) into regional economy
• Transport: roads/rail, ports, et al
• Power & transmission• Water & reticulation• ICT, other
Forward/ Downstream Linkages: Key
feedstocks into regional/local
economyManufacturing
(Fe/steels, polymers, Cu/Al, et al)
Agriculture(NPK, conditioners)
Construction(Fe/steels, cement, Cu/Al, aggregate)
Power(fossil fuels: coal,
oil & gas)
Other Sectors
Lateral Linkages: products into other sectors of the local/regional/global economy
© P.JOURDAN
The AMV: Realisation of the Mineral Linkages
REGIONAL ECONOMY
socio-enviro-political context
Consumption (induced) Linkages
Knowledge Linkages
HRD• Engineers &
scientists• Technicians• Operators, etc
RDI• Universities• R&D entities• Firm RDI, et al
Geo-knowledge
Systematic geo-survey & target development
RMCs
Fiscal Linkages• Levies, ground rents, • Duties/tariffs/excise• Royalties, dividends (equity)• CIT, RRT, WHT, PAYE, et al • SWFs, Stabilisation Funds, etc.
Jobs/wages (also in backward, forward, knowledge and infrastructure linkages)
EXPORTS to world economy (into GMVCs)
Intermediates
ManufactureRefiningSmelting
Mineral
ProcessingMINING
Mine
Developm’tExploration
Infrastructure Linkages (spatial) into regional economy
• Transport: roads/rail, ports, et al
• Power & transmission• Water & reticulation• ICT, other
Forward/ Downstream Linkages: Key
feedstocks into regional/local
economyManufacturing
(Fe/steels, polymers, Cu/Al, et al)
Agriculture(NPK, conditioners)
Construction(Fe/steels, cement, Cu/Al, aggregate)
Power(fossil fuels: coal,
oil & gas)
Other Sectors
Lateral Linkages: products into other sectors of the local/regional/global economy
© P.JOURDAN
The backward (procurement) linkages are crucial and are dependent on skilling & RDI
Backward/upstream Linkages: Inputs into local/regional/global minerals sector
Capital Goods• Machinery• Equipment• Plant• Vehicles, • et al
Consumables• Explosives/caps• Grinding media• Wear parts, spares• Chemicals/reagents• Fuels & lubes, et al
Services• Drilling/exploration• Finance, ICT• Labour/skilling• Engineering/Analytical• Logistics, catering, et al
Other Inputs• Construction,• Utilities,• et al
Generic mining supply-chain
Services to OEMs and Tiers 1-4:Drilling/exploration, Finance, ICT, Labour/skilling, Engineering (EPCMs), Analytical, Logistics, catering, et al
OEMs
http://www.informit.com/articles/article.aspx?p=2359420&seqNum=2
assembly
Local, exports
E.g. The supply chain network for yellow
metal equipment cab seats
https://www.slideshare.net/kenjisuzuki397/car-electronization-trend-in-automotive-industry-44007679?next_slideshow=1
MINES
▪ Mines > outsourcing (contract
mining)
Set specs for their OEM inputs
Mining Procurement Chain - Southern Africa (AMDC/BGR)
Source: BGR Federal Institute for Geosciences and Natural Resources (2016).
SADC Mineral Reserves as
% of global Reserves 2013
Average Mineral Exports
2007-2016 (MUS$)
Average Mineral Export Dependence
2007-2016
SADC 126579 66%
Angola 53125 97%
Botswana 5023 90%
DRC 5171 91%
Lesotho 291 34%
Madagascar 436 20%
Malawi 114 9%
Mauritius 174 7%
Mozambique 2358 55%
Namibia 2038 57%
Seychelles 17 3%
South Africa 49860 43%
Swaziland 135 7%
Tanzania 2139 49%
Zambia 4751 77%
Zimbabwe 947 41%
SADC average mineral exports and dependence (MUS$ & %)
Comoros excluded (new member 2017) *aluminium exports are based on imported alumina. Note: includes oil &gas; Mineral HS Codes: 25, 26, 2701-4, 2709/11/14, 28, 7701-6, 7108/10/12, 7201-6,
7218/24, 7401-7, 7501-5, 7601-3, 7801/2, 7901-3, 8001/2, 8101-12. Source Comtrade 2017
SADC mines/projectsCircles = ore resources;
>300, worth >$100 bnSource RMD 2015
The Mining Phakisa Journey to 2030 (IR 4.0)
2030 strategic vision
Short term Long Term
Intelligent mining
Continuous Mining
Autonomous Mining
Mechanised Mining (D&B)
Modernised Mining
X
Establish MEMSA & SAMPEC
Local to site program
Innovation Program
Export drive
Fun
din
g
TimeLaunch procurement leverage program
Localisation of Mining & Processing Equipment
Current MiningIteratively improve safety and productivity
Mining RDI Journey
MEMSA & SAMPEC Journey
LEGEND
Industrialisation and Sustainability• Localisation of Mining & Processing Equipment creates job opportunities in
manufacturing and services.
• Improved capabilities in mining equipment and services opens up opportunities for localisation in energy, rail, chemicals etc. etc. which means job creation.
• Exports of internationally competitive innovations means job creation.
Coal Mining Mechanisation: Socio-economic modelling results - Employment Impacts (capital intensive scenario with no imports)[1]
Note: The percentages quoted represent a change from the base scenario, which is continuation with the current status quo.
[1] Table 3.4.10 of “National and sector specific social and economic implications of selecting capital or labour intensive methods of coal production”, Task 7.14.1, 2002, by S G E Ashworth, N M H C MacNulty and A Adelzadeh (CSIR: Mining Technology and National Institute for Economic Policy)
MEMSA, SAMPEC & Tiers 1-3 Clusters
The aims are to:
•Enhance job creation/retention;
•Increase local content in current procurement (& jobs, state revenues, etc);
•Import displacement (+ve BoP impact);
•R&D investment for new systems;
•Incentivise to strengthen SA manufacturing capability;
•Develop Tier 1, 2 & 3 suppliers and BEE companies;
•Develop local OEMs for export of mining & processing goods and systems
Mechanisation of narrow reef hard rock mines allows for SA Mining & Processing Equipment Manufacturers to establish global leadership in narrow-reef, hard rock
mining & processing systems, in addition to other types of mining
Mining Manufacturing Development ProgrammeLocal development & manufacture of machinery and systems for Next
Generation Mining
Foreign spend
Local spend
SA OEMs &
suppliersMining &
Processing
Equipment Clusters (MEMSA-
SAMPEC, Tiers
1-3 Clusters)
The dti, & DST
Foreign OEMs
User Requirements Mine’s in-house R&D
NEXT GENERATION
MINING R&D
SADC JOBS
Foreign OEMs local manufacture
?Mining Charter?
Mandela Mining Precinct
Cluster Development
Technology Development
SAMERDIOther RDI:VA, et al
AOK
LoCM
MDB
NERB
RTIMS
SATCAP
MEMSA
Other Clusters
SAMPEC
MS-CSC?
PGM
Ferrous
MHSC
MQA
CGS
Mintek
CSIR
Supply-chain
manufacturing
firms
Supply-chain services firms
Wits
UP
UNW
US
UCT
UJ
Other HEI
Mining Companies
MC3
Industrial Incentiveschemes
Pvt R&D
Ex-mining job creation:
agro-projects
MCSADMRThe dti DSTS-C Clusters DPME
1. The AMV (Africa Mining Vision): 2009 and CMV (2014)2. SADC Protocol on Mining: 2000.3. SADC Mining Strategic Plan (MSP): 2001, 4. SADC Harmonisation of Mining Policies, Standards, Legislative
and Regulatory Framework in Southern Africa: 5. SADC Regional Indicative Strategic Development Plan (RISDP):
2003 Summit 6. SADC Industrial Development Policy Framework (IDPF): 2012 7. SADC Industrialisation Strategy and Roadmap: 20148. SADC Industrialisation Action Plan 2016:
9. The DRAFT
Regional InitiativesSADC Policy Documents Informing Regional Mining Procurement Strategies
1. The AMV (Africa Mining Vision): 2009 and CMV (2014)2. SADC Protocol on Mining: 2000.3. SADC Mining Strategic Plan (MSP): 2001, 4. SADC Harmonisation of Mining Policies, Standards, Legislative
and Regulatory Framework in Southern Africa: 5. SADC Regional Indicative Strategic Development Plan (RISDP):
2003 Summit 6. SADC Industrial Development Policy Framework (IDPF): 2012 7. SADC Industrialisation Strategy and Roadmap: 20148. SADC Industrialisation Action Plan 2016:
9. The DRAFT
Regional InitiativesSADC Policy Documents Informing Regional Mining Procurement Strategies
However, the SADC FTA
is probably the most
important regional MSC
development
instrument
• The SADC operating mines and projects provide a major opportunity (market) for the SADC mining and mineral processing inputs sector (upstream MVC).
• Using tonnage of ore produced (ex-coal) as a proxy for inputs demand, the SADC offers a larger mining inputs market (ex-coal) than the EU and China combined! Yet mining capital goods are dominated by imports, particularly from the EU.
• The backward mineral linkages are the most important to realise (particularly capital goods) as they have numerous multipliers, lateral migration (into other sectors) and can outlive the resources.
• However, they are critically dependent on RDI capacity and high level STEM skills.
SADC: Mining Projects
By Country (305 projects. Investment >$100bn, ~R1.2trillion)
(Source: RMD/SNL dbase 2014)
Conceptual Regional Mining Vision (RMV) RBI Strategy
RBI: Resources-based Industrialisation; RMC: Regional Member Country
Regional-Local Content SystemMining/processing Inputs (capital goods, consumables,
services). Recognition ∞ 1/GDP per capita
Key Regional Mineral-based Feedstocks Strategy (intermediates & semis)
• Iron/steel & semis (& coke)• Base metals (Cu, Al & semis)• Fertiliser Minerals (NPK) & formulations• Polymers• Cement, et al
Infant Industry Protection RMCs below SADC average GDP/capita (≤10% ≤7y)
Regional Mining & processing back-
& forward linkages
development strategy
Regional Minerals Sector Inputs & Key Feedstocks Investment Fund (VCF)
RMC benefit ∞ 1/GDP per capita
Regional Logistics Equalisation SchemeRMC benefit = cost/t-km above regional average
Regional STEM Skilling StrategyRegional Centres of Excellence with intra-regional twinning &
capacitation
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