The Mandela Mining Precinct – which industrial cluster Mining Equipment Manufacturers of South Africa (MEMSA) is an inherent part of – has been very successful in establishing a platform for all mining sector stakeholders, says MEMSA CEO Ossie Carstens.
“MEMSA and the Mandela Mining Precinct are joined at the hip. The Mandela Mining Precinct has identified a growth path that is also aligned to its funding path. We support the aims to connect all the right dots in mining to ensure that its future is secure.”
Carstens notes that South Africa’s current mining conditions require local manufacturers to develop and enhance technology “to stay ahead of the game”, as the mining sector is an important contributor to the country’s gross domestic product (GDP).
The sector contributed 7.3% to GDP in 2018 and the sector grew by 1.2% in 2018, representing a growth rate slightly faster than in the overall economy, according to estimates of Minerals Council South Africa. The sector is estimated to have contributed R356-billion to GDP in 2018.
“Local manufacturers will continue to play an important role in this space. They will remain a key factor in reducing the operating expenses of the mines over time, keeping it low in comparison with global competitors,” says Carstens.
Compared with global players, local manufacturers are not yet meeting the challenges of modernisation and mechanisation, he acknowledges. But several MEMSA members are innovating within their fields.
“For example, hydropower technology machines used to be limited to one platinum mine. That platinum mine then allowed the local original-equipment manufacturer (OEM) to develop unique and advanced technology, which it now exports.”
A number of companies are collaborating with the research programmes based at the Mandela Mining Precinct, under the South African Minerals and Extraction Research, Development and Innovation strategy.
Amid South Africa’s abundance of mines, local manufacturers have the ability to develop service excellence to accompany their products and use that to become the industry’s suppliers of choice, notes Carstens.
To ensure that South Africa benefits from its mineral endowment, it is important that local mining equipment manufacturing capability is enhanced to embrace the drive towards modernisation.
Local manufacturers will, however, need to improve on their ability to service and support their products better, he emphasises.
“Service excellence is one of many factors that set suppliers apart. Foreign OEMs are market leaders in mechanised mining machines, not because of their products, but because of the superior service capabilities and support structures from their governments.”
Mining Charter III
MEMSA specifically needs to take full advantage of the newly published Mining Charter III and the “massive advantage” that it has created for local suppliers, Carstens underscores.
As the local-content portion has been enacted, the industrial cluster will need to play an educational role in assisting local suppliers to set up a path to increase their footprint, he explains.
“The required local-supplier prerequisites of black ownership, broad-based black economic-empowerment compliance, and local content in products will determine in which country intellectual property resides. This will, in turn, guide industrial economic growth locally. This is the secondary inferred aim of the charter.”
Further, MEMSA will facilitate and enable local OEMs to become competitive on a global scale through benchmarking exercises; sensitise industry to the available presence and capacity of local OEMs; and continue research and development (R&D) at the Mandela Mining Precinct and its affiliate bodies.
Carstens notes that increasing the cluster’s membership – currently comprising 32 members – will depend on how well MEMSA is able to fulfil its role.
“The main challenge is for the mining industry to embrace the intent of Mining Charter III, which will enable local manufacturers to take their rightful place. There is a great opportunity here for cooperation between the mining industry and a responsive local supply chain with prices that are less affected by exchange rate fluctuations. As things stand, many locally manufactured products are at an international standard, and increasingly exported,” he says.
MEMSA is also contributing to the development of the Mandela Mining Precinct’s Technology Availability Readiness Atlas, to be launched later this year, which will ensure that all local manufacturers can list their products and specifications, and that prospective buyers can easily search for products before exercising the option to import.
“R&D outcomes from the Mandela Mining Precinct can create opportunities for MEMSA members for the development of local technologies resulting in increased local procurement if deployed in South African mines, resulting in a win-win for all,” Carstens concludes.