The role of mineral beneficiation in the iron and steel industry: exploiting the linkages in the iron and steel value chain for sustainable development

Abstract

The research aims to contribute to the existing debate on whether there is merits in South Africa using abundant mineral resources to industrialise. South Africa has abundant mineral resources and a comparative advantage in the supply and production of mining products such as gold, platinum, coal and iron ore. Despite the comparative advantage in mineral resources, South Africa is characterised by high unemployment rate and a declining manufacturing sector. The research argues that mineral wealth is a blessing and if well managed, mineral resources can spur industrialisation and employment creation. This can be achieved through appropriate policies and strategies that support downstream beneficiation. The research focuses on downstream beneficiation in the iron and steel value chain. The iron and steel value chain is the most important value chain for industrialisation and job creation. The iron and steel products are the most important feedstocks or inputs into the manufacturing sector. The research finds that despite the economic benefits associated with downstream beneficiation, there is currently little value addition taking place in the iron and steel value chain. South Africa exports mainly un-beneficiated or semi-processed iron ore, thus limiting employment creating opportunities. Challenges and constrains to beneficiating the South African iron and steel include: limited access to raw material for local downstream beneficiation, infrastructure bottlenecks, high costs of doing business, shortage of skills and anti-competitive pricing by producers of raw materials and minerals. Policy measures proposed in the research to overcome the challenges and constraints to downstream beneficiation include: better coordination between government departments responsible for industrial policy and mineral beneficiation, greater spending and investment in skill development, upgrading physical infrastructures, reducing the logistics costs and regulating the price of raw materials and minerals.