As is customary in South Africa, the early months of January and February bring, through the Mining Indaba, a renewed focus on the mining sector. This year, much like in recent years, the Indaba’s spotlight extended beyond South Africa, adopting a broader regional perspective. This shift underscores the growing importance of the African Continental Free Trade Area (AfCFTA) and its role in transforming the continent’s approach to mineral beneficiation.

Mineral beneficiation has emerged as a strategic priority for Africa as it seeks to overcome economic challenges, generate employment, and foster sustainable growth. The continent is rich in valuable mineral resources such as gold, platinum, cobalt, diamonds, and rare earth elements, yet much of this wealth continues to be exported in its raw form. This reliance on raw mineral exports limits the potential for value addition and hinders the creation of downstream industries that could drive broader economic development.

The AfCFTA has positioned mineral beneficiation as a key solution to these challenges, aiming to transform Africa’s approach to its natural resources. By processing raw minerals locally rather than relying on exports, the continent can create value-added products that extend the mineral value chain, foster innovation, manufacturing, and industrial growth within the region.

The Local Industry

In South Africa, which boasts some of the world’s largest mineral reserves, mineral beneficiation has become a cornerstone of the country’s economic strategy. The country’s historical reliance on exporting unprocessed minerals has been a major concern for policy makers and led to the development of the Mineral Beneficiation Strategy. The Strategy seeks to diversify the economy, create employment, and improve sustainability through domestic mineral processing. This approach also positions South Africa as a potential hub for high-value mineral products, attracting investment and promoting growth in sectors such as manufacturing, technology, and infrastructure.

While the benefits of mineral beneficiation are clear, the degree to which it has been realized varies across different sectors. For example, coal beneficiation has been more successful in South Africa, with most of the coal production used domestically for electricity generation. However, sectors like iron ore and platinum have faced challenges in local beneficiation. Between 1990 and 2023, South Africa saw a 230% increase in iron ore exports, while local sales decreased by 45%, partly due to the downsizing of companies such as ArcelorMittal. Similarly, platinum beneficiation declined by 55% between 2015 and 2023, driven by decreased demand from key international markets (TIPS, 2024).

Despite these challenges, mineral beneficiation remains a critical strategy for fostering inclusive and sustainable economic growth. It is a proven fact that downstream beneficiation sectors not only employ more people but also create more value from products. Furthermore, these industries typically consume less electricity and water compared to the mining sector, making them more environmentally sustainable. This shift toward beneficiation is key to building a resilient economy that is both economically diversified and environmentally conscious.

More finished products tend to have more stable prices compared to raw commodities, which are subject to fluctuations based on shifts in demand, geopolitical factors, and global market dynamics. Thus, the diversification of the export basket enhances economic resilience and provides long-term growth opportunities.

An African Perspective

The AfCFTA provides a framework for expanding local processing and refining capacities, promoting economic integration, and fostering a more sustainable and resilient economy. By unlocking the full potential of Africa’s mineral resources, the continent has the opportunity to turn its natural wealth into lasting prosperity.

According to the World Bank (2020), the implementation of the AfCFTA could increase the continent’s total exports by 29%, intra-African exports by over 81%, and exports to non-African countries by 19% by 2035. These increases will be driven by reduced trade costs and enhanced regional cooperation, positioning Africa as a leading player in the global economy.

However, transitioning into advanced manufacturing is not without challenges. It requires substantial investments in infrastructure, technology, skilled labour, and regulatory frameworks that foster innovation and industrial growth. Despite these challenges, the shift towards producing advanced downstream products offers substantial potential for stabilizing economies and driving sustainable development. As Africa continues to expand its efforts in mineral beneficiation, there is a clear opportunity to stabilize export revenues while fostering the growth of new, more resilient industries.

To truly unlock the potential of mineral beneficiation, Africa must focus on integrating value chains and supply chains across the continent. Some products should be produced locally to meet the continent’s needs, while others should be manufactured for the global market. As global demands evolve, shaped by trends such as climate change, technological advancements, and shifting consumer preferences; Africa must position its industries to meet both regional and international needs.

The OR Tambo SEZ

The OR Tambo Special Economic Zone (SEZ) in South Africa has made notable strides in advancing mineral beneficiation. The successful development of the Jewellery Manufacturing Precinct serves as a testament to the power of infrastructure and a supportive enabling environment in advancing beneficiation. This initiative demonstrates that with the right conditions, it is possible not only to develop industries but also to create a platform where local businesses can compete globally.

Strategically located in Gauteng, near OR Tambo International Airport, the SEZ benefits from a significant logistical advantage. The proximity to a major international transport hub facilitates efficient access to both regional and global markets, making the OR Tambo SEZ an ideal location for export-driven industries. This prime location strengthens South Africa’s position within the global supply chain, offering companies the opportunity to reach global markets with ease.

The SEZ provides businesses in mineral beneficiation with the opportunity to compete in the global market, where sustainability is a growing priority. With a focus on green products and environmentally responsible manufacturing processes, the SEZ ensures that local industries are well-positioned to meet these global demands. By integrating sustainable practices into its strategy, the SEZ not only strengthens local beneficiation efforts but also enhances the competitiveness of South African companies, helping them thrive in a market that increasingly values both quality and environmental responsibility.

Building on the success of the Jewellery Manufacturing Precinct, the expansion phase of the OR Tambo SEZ (The Springs Precinct and Precinct 2) will incorporate further advancements in mineral beneficiation, including, amongst others, electrolyser and fuel cell production.

For more information, visit www.ortambosez.co,za

References

World Bank. (2020). The impact of the African Continental Free Trade Area on Africa’s economy. World Bank Group. https://www.worldbank.org
Statistics South Africa. (2023). Mineral exports and local beneficiation trends: A 30-year overview. StatsSA. https://www.statssa.gov.za
Trade & Industrial Policies Strategies (TIPS) (2024). Beneficiation and Industrial Policy. https://www.tips.org.za