Mintek 2012 Strategic Plan briefing

Meeting report

Introduction
Adv Derick Block (Board Member: Mintek) tendered apologies on behalf of the Board Chairperson who was not able to attend.

Mr Abiel Mngomezulu, Mintek President  & CEO, introduced the delegates as Mr Sakhi Simelane, General Manager: Finance; Mr Peter Craven, General Manager: Business Development; Mr Alan McKenzie, General Manager: Technology; Dr Makhapa Makhafola, General Manager: Research & Development; and Adv Mamokete Ramoshaba, General Manager: Corporate Services.

Mr Mngomezulu apologised for the mishap on the previous occasion where Mintek had not been informed in time and was therefore unable to present. He pleaded that in future there be a direct relationship with the Committee Secretary to avoid such incidents occurring again.

Mintek 2012/13 Strategic Plan Briefing
Core business
Mr Mngomezulu explained that this was Research and Development (R&D), either on efficient mineral processing technologies, or on green technologies. It also promoted mineral based economies and built world-class R&D excellence, looking at human development. Other business included to uphold good governance; ensuring short term viability and long term sustainability of Mintek; and enhancing Mintek’s visibility and credibility.

Mintek objectives
These were aligned to Government outcomes:

- Outcome No. 4: decent employment through inclusive growth. Mintek key objective was R&D of efficient mineral processing technologies and value added products and services.

- Outcome No. 5: Skilled and capable workforce to support an inclusive growth part. Promotion of the minerals based economies of rural and marginalised communities; and build world class R&D excellence.

- Outcome No. 7: Vibrant, equitable and sustainable rural communities. To promote the minerals based economies of rural and marginalised communities.

- Outcome No. 10: Environmental assets and natural resources that are well protected and continually enhance. Research and develop green technologies and processes to mitigate the impact of mineral development on the environment.

- Outcome No. 12: Efficient, effective and development orientated public service and an empowered, fair and inclusive citizenship. Enhance Mintek’s visibility and credibility to all stakeholders; ensure short-term viability and long-term sustainability of Mintek; and uphold good governance practices.

Mr Mngomezulu showed pictures taken in 2008 of the dilapidated state of some of Mintek’s buildings, not being conducive to a working environment. Due to reprioritisation he was now able to show beautiful buildings and how the internal infrastructure was improved. Change houses had also been modernised to improve the lives of the people. He hoped that would encourage more intelligent people to work at Mintek.

Human development programmes:

- STEM (Science, technology, engineering, maths) programme, looking at students at pre matric level, with competitions testing them in maths and science. Private sector companies funded most of that programme.

- Bursars. In the two years the number of employees at Mintek that were studying had dramatically increased. A number of staff members were doing Masters and PhDs, including Mr Mngomezulu himself.

- A Graduate Development Programme, trying to encourage graduates to stay longer at Mintek. Instead of working in one area only, they would be moved to different divisions every three months, so that they would come to understand the whole company rather than only the specific field in which they had been trained.

- Internship and Learnerships. Mintek partnered with other Government departments and entities, for example with the Mining Qualifications Authority (MQA), where some staff members were sponsored by MQA in doing apprenticeship, so Mintek was in the forefront of bringing back skills. There were also internships with other companies such as the National Research Foundation (NRF) that subsidised the salaries of people employed by Mintek, giving them practical experience, and some of them were absorbed in the working environment, most being absorbed by Mintek.

- New Management Programme, which was trying to upskill the lower levels of people at Mintek and also the managers. Normally new graduates did not have experience in managing people so it was decided to train them in management skills. Unfortunately once trained they soon sought greener pastures and left Mintek.

- Management Advancement Programme (MAP) to further skill the people because if they were resigning Mintek was still skilling people for the benefit of the country.

- Executive Management Programme Regenesys, enhancing management styles being practised.

Mintek strategic projects:

- Derelict and ownerless mines rehabilitation
- ConRoast-Precious metal smelting and atomising
- Advanced sensor-based rock sorting
- Rare Earth Element refinery
- Savmin water treatment
- Northern Cape semi-precious gemstones
- Centre for mining waste
- Precious metals based advanced products

 1968- 2012 Annual Income showed a graph of what Mintek received from the State grant and from commercial revenue. Total revenue followed the trend of Mintek’s commercial work. Mintek was dependant on commercial work, without commercial work Mintek could not survive. State funding was for research and nothing else, the product of research enabled Mintek to do commercial work.

Speaking to the management structure, Mr Mngomezulu said it was disappointing that only 15% of people were women. Mintek was hoping that situation would improve.

Business Development
Mr Peter Craven explained:
The Business Development Division looked for new opportunities, mostly on the commercial side, and provided:

- Commercial support to other Mintek operating units

- Business intelligence via the Mineral Economics and Strategy Unit; participation in Department of Mineral Resources (DMR) Beneficiation Strategy; and participation in creation of special Economic Zones.

- Intellectual Property management and commercialisation, being fully compliant with the requirements of the IP Act

- Coordination of Mintek marketing, most of the direct marketing was done by the technical divisions themselves, the Business Development division looked at coordination mostly at national and international trade shows

- Initiation and leadership of certain special projects, such as the SA Rare Earth Refinery; and

- Managed Mintek’s contribution to the DMR rehabilitation programme.

Rehabilitation of derelict and ownerless mines
One of Mintek’s focus areas was on the rehabilitation of derelict and ownerless mines, on which 45 people were permanently employed and 395 in temporary employment. Rehabilitation of derelict and ownerless mine sites was not part of Mintek’s core technical skills, it was taken on because Mintek had environmental scientists and engineers and had well established project management and procurement systems and were therefore able to take on part of the work that was necessary for the DMR to do in terms of rehabilitation. The three-year contract was due to terminate at the end of the current financial year. The budget for the project was R90 million. The Council for Geoscience (CGS) had established a database of the derelict sites in South Africa and over 6000 sites had been identified. The sites most important for rehabilitation were those of asbestos, of which Mr Craven understood there were over 250, which would require about R3 billion to remediate. Mintek was doing a small component of the overall number of sites that needed to be rehabilitated in South Africa.

The CGS identified the site, the DMR provisionally prioritised the site, and Mintek defined the scope of work and the plan for the rehabilitation, prepared budget estimates. DMR confirmed the priority of the work to be undertaken in terms of the budget, Mintek prepared and evaluated tenders, supervised the rehabilitation and finally had it signed off.

Mintek had been very successful in those sites that it had done; they had been rehabilitated to world best practice. Where there was exposed asbestos rock subject to water and air erosion the site was revegetated to as far as its original condition as possible.

Technology
Mr Alan McKenzie briefed the Committee on key projects in the Technology Division:

The ConRoast technology, an alternative smelting technology for Platinum group element concentrates, was developed by Mintek to provide an alternative to smelting, which was currently tied up by the four main producers in the Platinum sector. The technology was commercialised by Jubilee Platinum. They had their own material and were developing Platinum mines themselves, but to increase the amount of material to a level where it would sustain the smelter operation they signed an off take agreement with ASA Metals to process chrome tailings to recover the platinum group metals (PGMs). Further announcements in terms of serious negotiations were expected within the next few months and it was expected to see an increase in the pace of commercialisation. Jubilee Platinum was building their first furnaces and had tied up the supply to be able to have a sustainable flow of material to put through that smelter. It was a fifteen year development path that was now in the final stages of coming into the marketplace.

The Bay 2 Atomiser plant built on the ConRoast technology. It allowed the platinum bearing metal that came out of the furnace to be reduced in size to a powder that made it much more amenable for further processing. The atomiser plant was built and in the final stages of commissioning. It was based on a two-year project with Anglo American Platinum and was a technology that they hoped to implement. It was a demonstration stave project. The capital to put the atomiser into its facility was R44 million, of which just over half was directly supplied by Anglo American Platinum, with an additional R15 million contribution from the Medium Term Expenditure Framework (MTEF). The project enabled Mintek to re-employ nineteen of the staff previously retrenched.

With advanced sensor based sorting, it was now possible, using a range of electronic sensors, to analyse ore rocks individually. That allowed one to sort those rocks to remove waste. One of the challenges going into the future was that the very good mineral deposits that were seen in the past were now exhausted. All deposits were becoming more complex and were becoming lower grade, which made it increasingly difficult to process them economically, yet society still demanded those commodities to improve our lifestyle. Sensor based sorting allowed that once that rock was mined, before processing began, to remove the waste. That was far more energy efficient because the waste was reduced up front so it did not have to go through the plant. It reduced the size of the plant and also the amount of water needed to process further downstream. This was breakthrough technology that would lead to a paradigm shift and lead to changes in how the industry worked. The gold sector was in the decline in South Africa, it was very deep, but if the waste rock could be separated from the ore, that waste would not need to be hoisted four kilometres to the surface, wasting power and energy, and that waste rock would not need to be processed on the surface. The waste could be removed from the ore and left underground. That would change the way the industry operated.

Rare earth element refinery
Mintek believed it was very important to develop the concept of a centralised refinery in South Africa. They were not actually that rare but the processing of them was very complex and very expensive. There were a lot of rare earth deposits in the southern African region but all were relatively small and would not carry the billion dollar cost of putting up a refinery. Rare earth was green metals used in low energy electric motors, in vehicles, batteries, electronics and so on. Mintek believed to develop a rare earth industry and to beneficiate that the concept of a centralised refinery was key to unlocking that value. MTEF funding had been received to build and run a pilot plant. That was fairly well developed, the designs had been finalised, and it was hoped to issue tenders for some of that equipment in the next month or two, so that within the next nine months or so the plant would be built and operation would begin. In terms of the commercial aspects of it, Mintek was working with six to eight of the current people assessing our rare earth deposits regionally and had good communications with the Industrial Development Corporation (IDC) to look at funding this and putting together packaging of the centralised refinery concept.

Savmin water treatment
Mintek had developed this technology aimed at treating water, including Acid Mine Drainage (AMD). Mintek signed a cooperation agreement with Veolia, one of the world’s largest water treatment companies as Mintek realised that it did not have the same degree of knowledge and expertise in water treatment. They already made significant inputs into cutting the cost of treatment, which was extremely expensive. The design of the pilot plant was completed with MTEF funding, a site was identified and within the next six months building the plant would commence and in the following year run that pilot plant to provide definitive cost studies for the cost of treating water.

Research and development
Dr Makhapa Makhafola briefed the Committee on some of the highlights of the R&D Division.
The Northern Cape semi precious stone project was MTEF funded at R51.5 million. The purpose of the project was to develop a gemmological beneficiation centre in the Northern Cape, where there was a wide variety of semi-precious gemstones. Through this project Mintek tried to increase self-esteem in the local community, to alleviate poverty and increase economic growth through employment. The idea was to train the people within the region to benefit from some of the semi-precious stones found within the region. Mintek was in discussions with the Northern Cape government to take over the centre.

The Centre for mining waste was funded by the MTEF, Mintek funding the preparatory phase. The aim was to minimise pollution caused by the mining sector. It was aimed at all forms of waste, particularly the effect waste had on scarce water resources.

The Nanotechnology innovation centre was funded by the Department of Science and Technology. The project was in partnership with the universities, the Water Research Commission (WRC) and Medical Research Council (MRC). It involved human capacity development, skills development and postgraduate training. The centre produced advanced gold nanorods for which Mintek had a provisional South African patent. An HIV antibody rapid diagnostic test was developed; Mintek formed a commercial partner, KMH Technologies, for the Malaria Rapid Diagnostic test and commercialised it. Several papers were published in leading world journals. An electro spinning device for electro spun polymer fibre mats for removing/deactivating bacteria/pathogens was patented.

Training and community development projects included jewellery and glass beads manufacturing and pottery manufacturing.

Corporate Services
Adv Mamokete Ramoshaba briefed the Committee further on Mintek’s efforts in the sphere of skills development and had human capital development.

Finance
Mr Sakhi Simelane briefed the Committee on Mintek’s finances.

In terms of revenue, Mintek currently received a state grant of R120 million directly from the DMR.  Money received from either Government or private sector funding aimed at conducting research was just below R100 million. Money received from commercialisation was just above R200 million. Revenue, excluding the state grant, was mainly commercial. 29% of commercial revenue was local revenue, 26% of the local revenue was Government funding from other Government departments or institutions; and 45% was mainly foreign revenue. 55% was from local, and 45% from foreign revenue.

Mintek normally spent R60 million to R80 million capital expenditure; last year was a little higher at about R81 million because of the Bay 2 operation but in the coming years was expected to remain at about R60 million. Challenges were deteriorating facilitates and ageing equipment.

Mintek made a profit of about R43 million in 2012. It was projected that the R500 million revenue would be reached in 2013 (see slide 41) but that was highly unlikely due to the fact that the Bay 2 operation was expected to give R60 million to R70 million was not yet fully operational.

Mintek maintained a strong balance sheet position and remained positive in terms of sustainability for the next three years.

Hurdles
Mr Mngomezulu concluded that there were challenges:

- Staff turnover. Currently 9% of people resigned annually, which meant that every eleven years 100% of people would have left Mintek and had to be replaced. The management training programmes were put in to try to encourage people to stay longer at Mintek.

- ‘Younging’ of the institution. Mintek was losing the older, more mature people who understood the operations at Mintek, at a rate of over 12% per year, which was a serious concern because people in the 40 to 50 age group were the pillars of the institution and understood what Mintek did. Currently the average age at Mintek was 38 years.

- The MTEF principle. Base line funding only increased at around the rate of inflation. Most of the money received from Treasury was through the MTEF. The MTEF system was project based for three years. That meant that a person who worked on a certain project might not be able to work on another project because the money only allowed Mintek to employ specific people on a specific project and if that money was stopped those people did not have jobs going forward. That meant the more the base line funding did not increase but only project based increase, it would get to the stage where Mintek had enough money to do a specific project, meaning that it could not grow the institution because it did not have the guarantee of any funding beyond the project funding it was receiving. It would be better if the MTEF funding was transferred as part of the base line and Mintek was assured it always had that money so it could employ more graduates to come in to do different projects.

Mintek community development projects
Mintek showcased one of the projects in which it was involved in developing communities and presented to those Members who were present gifts were made by people in one of the projects in which Mintek was involved. The people were trained by Mintek employees.

Discussion
Ms F Bikani (ANC) was concerned about the people who were being poached and asked whether there was any way that their salaries could be augmented in order to retain people with qualifications.

Ms Bikani understood that some work was being done in some of the PGM groups, how coordinated was Mintek’s work in terms of generating more employment rather than the loss the PGM group companies are experiencing. If such an effort was being made was it well coordinated or part of an area where there could be a change to assist the industries?

Mr McKenzie responded to the question on PGMs. The main reason for the current demand in the industry was that the demand had dropped; there was an over supply of Platinum group elements in the global industry. One of the main reasons was the economic problem in Europe where they mainly used diesel vehicles and Platinum was used in auto catalysts for diesel vehicles. There was not a lot that Mintek could do about that in the short term. Anything that could be done to increase the usage of PGMs would help in the long term. There were a number of initiatives, including the Platinum Development initiative that the Department of Science and Technology was looking at, but that was a long-term initiative. It was not easy to come up with ideas and solutions that would take up 10, 20, or 30% of the Platinum production. There was some coordination at that level of work.

In terms of the work that Mintek was doing, particularly with the ConRoast there was not really any coordination because what Mintek was proposing was competitive to the four main producers. Currently those four producers held the rest of the industry at ransom. The ConRoast technology was an alternative, it was an alternative that somebody could start up, put in a plant with a ConRoast technology and start producing themselves. In terms of ConRoast there was not coordination, purely because it was a competitive type situation.

In terms of the sector starting to interact and discuss solutions to their short-term problems, clearly there was coordination. Led by the Department there were task teams and so on. One had to separate the long-term possibilities to ensure increasing demand to short-term issues that were driven by demand.

Ms Bikani referred to the research work being done for partnering with private entities. If Mintek did some water works for Government it would probably charge less than a private company. Was there a way that Mintek and the Departments of Environmental and Water Affairs could develop something that could be for commercial use in water purification projects?

Mr McKenzie responded that it would be cheaper if Mintek did that work for Government. Mintek tried to do that, there were some coordination efforts and some additional ones coming on stream. It was not Mintek’s intention to necessarily be profitable. If Savmin was seen to be a solution that could make a major difference in South Africa, Mintek would be willing to talk to Government departments and Government entities and, if necessary, even to make that technology available free. Mintek would not allow a company such a Veolia to make a lot of money for the technology while Mintek in South Africa received nothing.

Ms Bikani was impressed with the issue of commercialisation; how could more Government departments support Mintek rather than doing business elsewhere? Outside companies charged exorbitant prices for water purification work, it would be for Government’s benefit.

Mr E Lucas (IFP) sympathised in terms of the staff turnover, it was happening all over, the more a company delivered, the more the staff was poached.

Mr Lucas said rehabilitation was a major problem and most of the time it was onerous and also meant spending resources that the institution did not have.

Mr Lucas was shocked at the alternative smelting methods that could be better used with smaller companies that had to take the stuff to big furnaces and lose profitability. That would encourage people.

Mr Lucas asked whether Mintek had looked at purifying seawater?

Mr Craven believed that water would be the biggest issue facing the mining industry bar none, and would determine what the industry looked like in a century’s time, not only effluent contamination but sources of clean water. Seawater purification was an established technology used all over the world, including South Africa in certain municipalities, mostly to supply municipal drinking water requirements but also in certain parts of the world industrial applications. Chile desalinated water for the copper mining industry. It was a very expensive technology and transport of the water was a big issue, so was only applicable to those mines that were adjacent to the sea and had high water requirements. First prize was to use salt water without desalinating it. Mintek did not have any technology because it would be reinventing the wheel.

Mr Lucas thought training for three years was very encouraging and positive.

Mr Lucas referred to funding. He was impressed with the Mintek operation that took a dive and came up again and asked how it could be financed. Foreign funding was 45%, this should be looked at because it was beneficial for the whole of South Africa.

Mr Lucas asked what a clean room was.

Mr Makhafola explained that when in those facilities one had to cover everything, including shoes, and your mouth, to ensure that no element or bacteria could get in, it was a very controlled atmosphere.

Mr M Sonto (ANC) thanked Mintek for the presentation; it showed they were making serious efforts to keep themselves credible as an entity, and also sustainable.

Mr Sonto said because R&D, especially in mineral processes and technology, was one of Mintek’s core business areas, the nation was looking for five key strategic minerals on which the State would be a depend on to deal with the levels of poverty and unemployment, how long would it take Mintek to be able to say what those five strategic minerals were? The price of gold was declining but the country so endowed with minerals might have strategic minerals that could sustain the nation.

Mr Mngomezulu responded that officially that was not Mintek’s domain, Mintek advised. His personal opinion, with the consultation of Mintek, was that there were three groups of strategic minerals: one grouping of energy minerals because nothing could be done without energy minerals – coal, uranium, Chlorium? The second grouping was economic minerals – gold, PGMs, and diamonds. Those minerals enabled South Africa to have better economic leverage in the world. The last grouping was the steel making minerals because steel structures would always be needed.

Mr Sonto asked whether the number of derelict and ownerless mines was increasing or decreasing? He saw a gap where people could try to run away from responsibilities.

Mr Craven responded that it was probably increasing. All over the world the problem was not so much the sites of large mining operations and large companies, it was the multitude of small operations. The biggest problem in Europe was not the base metal, precious metal, iron ore or copper, it was road aggregates. Normally the bigger companies tended to adhere to regulations and make provision for rehabilitation. Rehabilitation was expensive so smaller companies would do the least they could and the easiest way for them was to go into liquidation and walk away. It all depended on enforcement of the environment or impact plan that they submitted and the permit originally granted. Mines were also required to contribute to rehabilitation provisions and it depended on the enforcement of ensuring there was adequate funding had been provided for so if they did walk away or go into liquidation there would be money to rehabilitate that operation.

Mr Sonto asked whether Mintek found cooperation or obstruction when rehabilitating mines in farm areas?

Mr Craven said Mintek did not have a single incidence of a farmer not wanting to cooperate. Farmers always wanted to cooperate because it was a mess on the land; it was an erosion problem, so rehabilitation created usable surface ground for them. The problem was when the site was in a developed area where communities had inter grown between the sites where there were mining operations moved into artisanal mining where people were making bricks from the clay and mining the coal. A lot of people were using those operations and those operations required relocation. Mintek was not well equipped to handle social issues of relocation, housing, etc. Communities were making a living out of pickings from the site and the perception was Mintek came and spent money on rehabilitation. A lot of those people had suffered for generations from the effects of mining, for example, from asbestos. They saw a company spending a lot of money and thought how they could get money out of it.

Mr Sonto asked whether the rehabilitated mines were ready for agricultural use or what were they ready for?

Mr Craven responded that the mine could be rehabilitated to whatever the requirement was. In certain cases where it was on the side of a mountain it would be rehabilitated to be as self-sustaining as possible, but if it were rehabilitated for natural vegetation but if a farmer wanted to use it for something else there would be a problem of exposing the asbestos. A compromise could be reached with the farmer or the municipality to rehabilitate certain sites so that they could be levelled and used for a park – fenced, grassed, irrigation. Mintek prepared the ground so that it was suitable for construction afterwards if there was development; looked at selected sites to be used for bamboo planting, which was an opportunity that the DMR was looking at; and in other cases took it back to the original state.
 
Mr Sonto was happy that retrenched staff were re-employed after three years - how did Mintek keep track of them?

Mr Mngomezulu responded that Mintek was a family rather than a working environment. In a family when someone left one tried to find where they were. The people who were retrenched were at operator level and when that project stopped and there was no work for them to do they were retrenched, but were told that as soon as business came back they would be called.

Mr Sonto asked why Mintek was not attractive to women?

Mr Mngomezulu explained that those who left did so for very valid reasons, to stay home with the children, to emigrate.

Mr J Lorimer (DA) congratulated Mintek for doing well and profitably. He referred to the Rare Earth plant and asked what was the key to making that happen?

Mr Craven said if looked at the Rare Earth business as being mines that were unable to get off the ground at the moment because they did not have a natural off taker for their product from those mines, and those mines were all over Africa, not only Southern Africa, that was the first part. The next block would be the refinery; the next block would be the manufacturing downstream applications of Rare Earth. The missing link was the refinery. As opposed to most applications that Mintek looked at for a big ore deposit somewhere and how to exploit that ore deposit a refinery was needed. This one was different. There were a number of mines, none of which were big enough to support a refinery, South Africa could play a role in the downstream fabrication industry but was missing the link of having a refinery. Southern Africa did not have world class resources but would be one of the five poorer countries and had to be very careful of the role that it played. It had to have access to feed material, so a number of mines would have to start producing. Capital was not a problem. If it were a good project the money would be there. Technology was there. In terms of access to the market Mintek was talking to the Koreans, Japanese and certain European off takers of the material that would take off most of the material but would ensure in the project to allow for the development of the South African industry. Mintek was talking to strategic partners. The biggest problem was linking the mine’s production with the requirements of the refining, the timing, ownership, etc.

Mr Lorimer asked whether people were mining Rare Earth metals already and exporting them and if a refinery was built how much more of that mining would happen? If it went ahead how would Mintek make money out of that and would it be significant money?

Mr Craven replied no. South Africa produced in the 70s and 80s; it was a by-product from Richards Bay Minerals but stopped producing when the Chinese took dominance of the world market, and also because transporting Rare Earth in the raw form would normally be transporting radioactive material. Certain operations such as Steenkampskraal were close to operation because it was an old mine that had been started up again, but until they had an off take for the material they would not start up production.

As to whether there would be more in the future, there were a number of operations. Mintek was doing more research into Rare Earth than anybody else in the world and was involved in projects throughout the world. Mintek was involved with about ten projects in Southern Africa. There would be mines in the future providing there was a refinery.

In terms of how Mintek would make money, Mintek had initiated the concept of the central refinery and had the technology but did not only want to be a technology provider. Mintek owned the deposit and expected partners to buy into the concept.

Mr Lorimer referred to Savmin and asked what technology was decided on for the plant? Did it have significant cost savings in water treatment, had it been done before? Who would roll it out? Would that be a solution to Acid Mine Drainage, and would Mintek make money?

Mr Craven responded that Mintek was starting its technology from a technology it developed so had a technology, Savmin, a unique technology patented by Mintek and would have an application in certain niche areas of AMD. AMD was usually lumped together as one sort of contaminated water, it was not, there were different types of AMD. It was unlikely there would be one technology that was a panacea to all the problems. It was more likely that different technologies certain of them would be more suited to very large volumes, others might be better suited to treat very small isolated on mine applications and depended on the severity of the contamination. Savmin,  Mintek’s technology, looked very promising in certain niche areas and then taking it to the next level not going to say it would be the key to solving all South Africa’s AMD water problems. Mr Craven believed it would be a combination of technologies. The Council for Scientific and Industrial Research (CSIR) also had its internally developed technology and at this stage it was not known which was better for which niche application.

How to roll out that technology and how Mintek would make money out of it? Mintek would do it like other technologies that it had licensed. When Mintek established what its market niche was would establish the best way to roll it into the market. At this stage Mintek had a cooperation agreement with Veolia. Veolia was by far the world’s largest water treatment company so they could be a very good partner to roll it out globally as well as South Africa, but Mintek had not committed totally at this stage but would probably licence it and Mintek would make money out of the royalties on the application of the technology.

 Mr Lorimer asked whether Mintek had patents on the sensor based sorting and did Mintek expect to make any sales? On all of that would there be hikes in revenue, would they be significant, and when would that happen?

Mr McKenzie responded no, Mintek did not have patents. This technology was developed in Europe for waste retrieval and waste sorting for recycling. Mintek was trying to take that technology and migrate it for the minerals sector. Mintek’s role was not so much in the development of the equipment but in applying its knowledge of the minerals sector to try and apply those technologies from a different industry into the minerals sector. It was probably not something that Mintek would make money from, but could make money from advising companies on the application of that equipment, but it would make a huge difference to the mining sector and to the industry generally.

Mr H Schmidt (DA) noted that Mr Mngomezulu had mentioned in the media that we might need a State owned mining exploration company. What interest would Mintek have in a State owned mining exploration company? Mr Schmidt was interested to know what the link was.

Mr Mngomezulu was an interim chairperson of a State mining company and sometimes spoke on behalf of that State owned organ. He had said that at the beginning of his career in 1979 he became an exploration geologist for a State owned mine and that company found a number of projects and findings, so he understood what a State exploration company could do for this country. Those findings of the 1980s were producing mines today. He believed that could happen again.

Mr Mngomezulu responded to a question as to what Mintek was and what it did. Mintek was not established to make money. Mintek was established to develop certain technologies in order to sustain the South African mining industry; that was Mintek’s core value. If surpluses were made at the end of the year it was not because Mintek was established to make surpluses. Mintek was established to make technology. That was also an argument with some of the board members that tended to see that if Mintek made surpluses the performance scored. That was a wrong principle. One should look at how many technologies Mintek developed.

The Chairperson was interested in the beneficiation centre in the Northern Cape and discussions with the government of the Northern Cape to take over the centre. Was there a likelihood that that would happen and, if so, did they have the know how in terms of running that Centre?

Mr Makhafola said Mintek had met with the provincial government and would be meeting with them to try to identify a site for the Beneficiation Centre. The biggest problem was taking over and ensuring that the Centre was sustainable and ensuring the people benefited from the training done. Mintek was still in discussions with the province in terms of how to take over the Centre.

Mr Mngomezulu added that Mintek was trying to use the same principle that it used in the jewellery section. If funds were available, to train the people and at a level of the take over to slowly move away once they were established.

The Chairperson continued on the funding levels of Mintek, Mr Mngomezulu had said that Mintek was currently dependant on commercial work, without which the revenue streams would be very limited and Mintek would be unable to meet its demands and requirements. It was being discussed, not only in Parliament but in the structures of the ruling party, that the research institutions in the country must be capacitated. South Africa could not be building a developmental state while on the other hand there were state institutions that were dependant on commercial activities. There had to be a balance to ensure that funding for R&D was increased, and National Treasury did welcome the deliberations. It was hoped that Mintek would see a difference in its next round of MTEF discussions with National Treasury, but that would have to start with the Department itself. In its oversight visit role the Committee had seen a lack of capacity for the Department to implement laws passed in Parliament. In KwaZulu-Natal a number of mining companies were lax when it came to compliance because they knew no one would check them because of that lack of capacity.

Mr Mngomezulu said that Mintek appreciated what the Chairman had said on the finances. He hoped that at some point Government would come to thinking that those who performed would be rewarded.

The Chairperson informed Mintek that it would form part of the priority in terms of presenting. The last occasion when Mintek was scheduled to present did not happen because Mintek was not advised in time.

The Chairperson thanked Mintek for the presentation.