Facing fierce international competition and a digital revolution, local manufacturers need to innovate, collaborate and find finance solutions.

It is no secret that South African manufacturers of capital equipment face strong competition from foreign original-equipment manufacturers who can import similar equipment at lower costs, for example, Chinese manufacturers with access to subsidised steel, or which offer fast and affordable credit to customers.

To remain competitive despite this scenario, Mining Equipment Manufacturers of South Africa (Memsa) continues to advocate for finance and credit insurance options to match the needs of local manufacturers and exporters.

“The Industrial Development Corporation is working hard to provide finance options to meet the needs of our capital equipment industry,” the cluster says, noting that the Downstream Steel Industry Competitiveness Fund is offering finance to the industry at highly discounted rates, effectively providing an interest rate subsidy.

The issue of lower priced imports is exacerbated by “little or no tariff protection” for many locally manufactured products in the mining supply chain, and factors such as increasingly expensive and unreliable inputs continue to drive up local costs.

Buyers do, however, recognise that South African manufacturers’ quality standards and products are fit-for-purpose and well suited to the South African mining environment, Memsa notes.

In addition to price, research and development (R&D) and innovation are key to competitiveness. The cluster highlights that it applauds the extension by National Treasury of the Innovation Income Deduction Tax Incentive for R&D.

“We continue to advocate for a less strenuous administrative burden in this, and other, government incentives, and we believe that the Mandela Mining Precinct (MMP) could play a role in preselecting suitable projects for funding,” Memsa says, though it laments that the available State support “does not nearly meet the demand”, when it comes to funding for prototyping and commercialisation.

The MMP is a public-private partnership between the Department of Science and Innovation and Minerals Council South Africa, and is aimed at revitalising mining research, development and innovation in South Africa to ensure the sustainability of the mining industry.

An institution such as the MMP “could play an expanded role in streamlining and coordinating funding for local R&D, and innovation”.

Future Trends

Emerging trends in innovation and technology are expected to shape the future of the mining industry, and Memsa outlines that some of the key trends will be seen in the data science, manufacturing and mining sectors.

Data science, which focuses on the collection, analysis and continuous monitoring of information, may increase the role of artificial intelligence (AI), while simultaneously advancing the predictability around wear and tear, maintenance, and outflow, leading to greater efficiencies.

Minerals Council South Africa recently published a report developed by consultancy PwC in collaboration with the MMP, which highlighted how mines are deploying digital technologies to optimise and integrate reporting, mine planning, logistics, supply chains, and even finance functions.

There is also a pressing need for systems integration and interoperability, which means that customers are “looking for solutions, and not just products”. This can be resolved through collaboration between local manufacturers in creating marketable solutions for customers.

The growing role of digital technologies, the cluster adds, also highlights the importance of open source and interoperability rather than an exclusive, or single, solution.

Collaboration with local and international technology partners is crucial, but South African companies tend to lag in terms of collaborative intelligence. Accordingly, Memsa plans to support its members in building capacity for collaboration guided by the ISO 44000 standard for collaborative business relationship management.

Manufacturing, meanwhile, will see greater automation, though it is likely to remain limited, owing to smaller production runs and customised equipment, which tend to be the norm.

However, Memsa emphasises the importance of building the local production tooling industry, as it is “crucial to creating more manufacturing jobs”.

Memsa’s merSETA-funded research into Fourth Industrial Revolution-related skills indicates that coordination and a flexible approach to new learning methods and qualifications is needed to provide the necessary skills. Universities have made strides to fill the gaps, though the cluster notes that the technical and vocational education and training sector is struggling to provide the required skills and experience, “despite pockets of excellence and progress”.

As such, Memsa emphasises the importance of continued efforts by all stakeholders to identify and cater for urgent and emerging skills needs.

Some of the technologies which manufacturers plan to incorporate in the coming years include the Digital Twin technology, robotics and robotic process automation, the Internet of Things and AI, as well as machine learning, advanced automation, telematic systems and more.

“There is scope for increased collaboration between manufacturers and the South African information and communications technology sector, as well as the production technologies industries,” Memsa states.

For mining specifically, the cluster says that technologies for sustainability will advance, and that improved and new technologies for safety – such as the trackless mobile machinery safety regulations, that have been in effect since December 2022 – are a major drive for R&D and innovation and involve a “remarkable level of collaboration among miners, researchers and technology providers”.

Additionally, the increasing global focus on environmental, social and governance in mining will advance, alongside greater flexibility regarding energy sources and the rising importance of green energy metals.