Department of Science and Technology Centres of Competence: Departmental briefing

Science and Technology

04 March 2015
Chairperson: Dr B Goqwana (ANC)
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Meeting Summary

The Department of Science and Technology (DST) briefed the Committee on the set up, achievements and plans of the DST Centres of Competence (COCs). These were described as presenting opportunities for commercialising research, maximising profits, research development and overall development for South Africa and its partners. COCs were still largely funded by government, and there was a need for the private sector to be encouraged to invest more, and to invest at a much earlier stage of the COCs' development. This was an issue explored in some depth during the discussion session and there was general consensus that there had to be more creative and better incentives in order to ensure investment, notwithstanding the significant risks in new products. Government should take a stronger leadership role.

The technology created by COCs was said to have the potential of bringing about a radical way of improving South Africa’s growth trajectory. Greater opportunities and benefits would ensure that value was obtained from South Africa’s minerals, in particular, through beneficiation, which would then have positive spinoffs for a larger pool of South Africans. The current situation where South Africa’s minerals either benefited only a few local people or foreign actors was not in line with the plans to develop the country, nor of ensuring that development and technology must benefit all. COCs were a platform to ensure that public and private sectors and the communities of South Africa were able to interact. During the presentation, several was the partnerships with industry and universities were highlighted, noting that the latter were an important part for the research and development process and could provide human resources when it came to the expansion of COCs. Some examples and comparisons were provided for comparable institutions in Australia and EU.

28 COC type projects had been initiated since 2010. There were four in Space Science, three in Hydrogen and Energy, eight in Energy and Transport, seven in Biotech and Health, one in Titanium, three in Advanced manufacturing, three in fluorochemicals, and one in information security. Some had been suspended, some had moved to the conceptualization stage and others were fully formed. Details were given of their status, and the plans to move from framework to programme to COC programme resourced through dedicated funding. Some individual COC initiatives may qualify for top-up funding or be transferred and a final report was to be presented in May 2015. Descriptions in detail were given of the Hydrogen SA (HySA) COC, concentrating on hydrogen and fuel cell technology, and Titanium COC.

Members asked how DST intended to encourage scientists to stay in South Africa. Several Members questioned the private sector investment, making the point that it was too little, often too late, and needed to be further incentivised. They felt that DST was losing out on many developmental and scientific research and development opportunities because it was ending up investing the lion’s share of money in the COCs, whilst the private sector invested far less. They asked also how the DST was intending to attract more investors. Members asked for an explanation of the differences between the Innovation Bridge and the Centres of Competence.They were interested to hear about relationships between the DST, the Department of Trade and Industry, SA Bureau of Standards, and other related departments. They urged that departments must take a broad approach and avoid working in silos. Much of the discussion was also centred on how beneficiation could improve, pointing out that the provinces richest in terms of resources were the poorest in terms of services and income of their residents. Members wanted to know why the Framework was not initially budgeted to, and why the external and internal assessments had been necessary. They asked what the DST was doing to exploit the potential in the sugar cane industry for alternative energy and what in general it was doing around renewable resources. They asked which universities were in partnership, and what their relationship was, and how the intellectual property was being arranged. Questions were raised on the individual projects cited in the presentation, as also on the use of maganese and fluro-chemicals and the view was expressed that South Africa needed to be stronger in trading minerals. They asked whether, in addition to human resources being provided by some firms, technology was also provided, and noted funding from some international players.

Meeting report

Department of Science and Technology Centres of Competence (COCs): Departmental briefing
Mr Mmboneni Muofhe, Deputy Director-General: Technology Innovation, Department of Science and Technology, noted that the Department of Science and Technology (DST or the Department) had a number of Centres of Competence (COCs), which produced technology that had the potential of bringing  radical  improvements to South Africas growth trajectory.

Centres of Competence were outlined in the DST's COC Framework of 2010, and compared with similar programmes
internationally. He would specifically outline developments in Australia and the EU as indicative examples of future research, outline the current status of projects from 2010 to date, and discuss the way forward.

He noted that COCs have been envisaged as collaborative entities which were established, and preferably led by industry, and resourced with highly qualified researchers associated with research institutions, who were empowered to undertake market-focused strategic research and technology development (RTD) for the benefit of industry and the economy at large.

Some basic assumptions applied to the COCs. They purposely did not have a rigid structure, allowing them room to evolve. The purposes for which they were set up could include:
- To solve social challenge: across a broad range. COCs could be used to improve service delivery, which would ensure wider and faster access to resources for communities in South Africa.
- To develop industry that would subsequently engage a research provider
- To take advantage of a market opportunity, which could entail filling a niche market that had not yet been filled
- To help South Africa (SA) to gain competitive advantage by using the innovative capacity of universities and research communities, while contributing towards human capacity development

The funding must reflect unique requirements of COC. The combined industry contribution should represent around 30% of total costs, which could be made up of in-kind contributions.

Mr Muofhe compared South Africa's current programmes to those in Australia and the EU, citing but two examples. He said that the COCs were similar to the Cooperative Research Centres (CRC) Programme of Australia and the Competence Centres (CCs) of the European Union (EU).They were all initiatives that largely focused on improving and fostering relations between public, private and civil actors, with regard to research and technological developments, which could improve the interests of not only the actors involved but go beyond to those to reach others who were not necessarily directly involved. Four broad models were envisaged.

He then outlined that 28 COC type projects had been initiated since 2010. There were four in Space Science, three in Hydrogen and Energy, eight in Energy and Transport, seven in Biotech and Health, one in Titanium, three in advanced manufacturing, three in fluorochemicals, and one in information security. Some had been suspended, some had moved to the conceptualization stage and others were fully formed.

Most COCs were initiated and funded by DST. Some COCs were still at conception stage (where they were still finalising “Roadmaps” to determine future research trajectory and research partnerships). Most COCs currently were focused on formalising research collaboration partnerships, and had taken the research platform route, such as the Strategic Health Innovations Platforms/Partnerships.

The Flourochemical COC was near commercialisation and had already completed phases 1 and 2 of Multipurpose Flourination Pilot Plant (NFPP) at National Energy Corporation of South Africa (NECSA). Phase 3 and 4 were completed in 2013. The Business plan development was undertaken during 2014

Mr Muofhe outlined that DST had plans to move the COCs forward. The DST hoped to move with the conversion of COCs from a framework, to a programme, to a COC Programme that was resourced through a dedicated COC fund, as government’s portion of the overall programme contribution. Some of the existing COCs would be reclassified, as research partnerships or research projects or platforms. In addition, there was to be graduation of individual COC initiatives, on a case-by-case basis, to quality for top-up funding, where appropriate and/or transfer them to the Environmental Impact Analysis Process (EIAP), the Technology Innovation Agency (TIA) or appropriate incubator programmes. A final report on this was expected early in May 2015.

Mr Muofhe then outlined some of the existing DST COCs.

Hydrogen South Africa (HySA) was divided into catalysis, infrastructure and systems. It had a strategic goal of wealth creation through value-added manufacturing and development of the PGM catalysis value chain, with a goal of supplying 25% of the global hydrogen and fuel cells market by 2020. It further intended to build on existing knowledge and capabilities to develop local cost-competitive hydrogen generation solutions, based on renewable resources. This would have the additional benefit of promoting equity and inclusion in the economic benefits of South Africa’s resources.

DST, through this COC, would be one of the key drivers of hydrogen and fuel cell technologies. The advantage of these included energy security, decarbonisation of the energy system, and the fact that fuel cell vehicles had potential zero emissions, long range and fast fuelling capability. there were also applications in the Power to Gas market.

The implementation phase was broken down into three phases, running overall from 2008-2023.

The had been collaboration with South African universities such as the University of Cape Town, Stellenbosch, University of the Western Cape and others. Collaborations with industry included efforts with Impala Platinum, Anglo American, South African Post Office, Transnet and Hot Platinum.

Titanium COC
Mr Muofhe noted that there had been steady growth in the demand for Titanium. South Africa had large quantities of raw titanium, and with the assistance of the new technology created by COCs it could get more value out of its titanium deposits by reducing costs.

The Chairperson spoke about how important it was to develop the future of South Africa together and improve the economy. He asked how DST would keep scientists in South Africa as they had in the past been poached by more developed states.

Dr A Lotriet (DA) said she was concerned about the comments made during the presentation with regards to the private sector only investing at a later stage.  The Department, given its low budget, could not afford to keep on paying for the R&D costs. The DST was losing out on many developmental and scientific research and development opportunities because it was ending up investing the lion’s share of money in the COCs, whilst the private sector invested far less. She commented that considering the lack of private sector investment, the achievements to date were amazing.

Dr Lotriet note that there were already some research and development (R&D) tax incentives. However, she wanted to know if there were also any other incentives that would encourage the private sector to invest more in COCs, and, if so, were companies aware of such incentives. She asked if a greater awareness was likely to improve investment by the private sector so that that the private sector invested from the very beginning and thus ensured that the Department did not carry all the risk. In short, lack of private  investment seemed to be holding the projects back.

The Chairperson acknowledged the importance of Dr Lotriet's question. From the political standpoint, the question was quite relevant. It was necessary to know whether South Africa could get the economy that is needed to really address unemployment and poverty, and that needed to be addressed as a priority. In light of the fact that the private sector wanted to make profit but did not want to take the risk, preferring that any risk be taken by the DST, he wondered how the Department would recoup the money so that it could then start other new investments initiatives. Further to that, he asked how the DST would attract private investors, despite the risks that existed.

The Chairperson also asked for an explanation of the difference between the Innovation Bridge and the Centres of Competence.

Mr N Koornhof (ANC) apologised for being late, and explained that he had been at another meeting where the Industrial Policy Action Plan (IPAP) was being outlined. He noted that IPAP was important but that could not be successful without the work that was being done by the DST. He then asked if there was a good relationship between the DST and the Department of Trade and Industry.

Mr Koornhof noted that South Africa was exporting raw goods all over the world but only an estimated 1% was being beneficiated locally. He asked how much raw titanium was being exported out of South Africa, and what were the DST’s goals for increasing the exportation of refined titanium as opposed to raw titanium.

Mr Koornhof noted that several organisations in the research field were cutting back on their spending, such as the South African Bureau of Standards (SABS) and asked if this was true also for the DST. He also wanted to know about the relationship between SABS and the DST.

The Chairperson acknowledged that there had been a tendency for departments to focus too much on the internal happenings of their own department and because of this, become unaware of other departments' developments. He urged greater co-operation amongst departments so that there was more efficiency. He made reference to the fact that Limpopo was one of the richest provinces, in terms of resources like titanium and platinum, yet it remained one of South Africa’s poorest provinces in fact.

Mr M Kekana (ANC) welcomed the presentation. He wanted to know why the Framework of COCs was not budgeted for. He asked who had drafted that Framework. After it was published, an external assessment was done and he wondered why that was necessary. Following that external assessment, with the final report expected by May 2015, he then wondered what the outcomes were of the internal assessment.

Mr Kekana also requested more detail on the modules around the Intellectual Property (IP) and the protection of rights, particularly because there were external/foreign investors involved.

Ms L Maseko (ANC) thanked the presenter, and said that she shared some of the concerns raised by previous questions. She noted that South Africa was  ‘in trouble’ when it came to energy generation. DST was known for being the leading innovative department. She wondered what it had done to investigate or exploit sugar cane as a possible source of energy. She referred to the situation in Mauritius as an example; for eight months of the year the private sector was able to sell to the public sector and with very little wastage on sugar cane. She also commented that although wind power could be a prime source of energy, particularly in the Western Cape, it had been under-utilised.

Ms Maseko asked what the DST had done to follow up with the Department of Trade and Industry (dti) and what the feedback was on some of the projects which had been finalised and forwarded to them.

Ms Maseko noted the reference to partnerships with universities and asked if UNISA was not a partner on some of the COCs, and if not, then why not?

Ms Maseko referred to the earlier question about the Innovation Bridge, asked if this was part of the COCs project, and how it would benefit the DST.

Ms Maseko noted the foreign partnerships on the COCs, with EU, Australia and China. She noted the stipulation that there must be one Australian end user, and asked if there had been consideration of South Africa’s intellectual property (IP) in relation to these foreign investors.

Mr C Mathale (ANC) referred to the question about the private sector’s involvement and how this was important in order to develop the COCs. He expressed his opinion that government should not just talk about beneficiation, but should take a lead in order to ensure that things were actually being done.

Mr Mathale noted a point in the presentation about budgeting an amount of R74 million, and thought that this amount of money could be made available by a small private company. The State cannot budget that way, unless the goal was for this initiative to merely survive, and not thrive. If the goal was to radically change South Africa, and to change its growth trajectory, then South Africa needed to move away from the 1.4% growth rate to something higher, else there would never be a radical shift.

Mr Mathale agreed that identifying titanium was important, but pointed out that there were other sources which were important for South Africa; citing the example of magnesium and saying that South Africa's reserves accounted for 80% of the world’s magnesium. Manganese, which was considered one of the special minerals, should also be a concern.

Mr Mathale shared the concerns already expressed about beneficiation, and the mining of resources such as manganese, and said that South Africa should take on more of a leadership role when it came to how it traded it minerals with its trading partners, in order to ensure that South Africans would benefit. The concern was that ‘big players’ such as BHP Billiton mined these minerals using mostly mechanised processes, utilised very little human resources, and therefore the beneficiation is not widespread. In addition to this, another concern was the sustainability of these mining activities, in light of the fact that these minerals were non-renewable. He suggested that there should be a re-think about how the Centres of Excellence should be structured and how the private sector came into play, how to incentivise them and make sure that they made business sense. There should be a better way of structuring incentives for the private sector and having a better way of research and development. He referred to the Chinese example of R&D into titanium and suggested that South Africa should follow a similar path.

The Chairperson made the point that South Africa was obsessed with radical change, and that there must be a shift from the past to the present and the future. He acknowledged that individuals were being taxed more heavily, rather than business carrying the bulk of the tax burden. He urged that people should be encouraged to stay in South Africa and business should also be encouraged to invest in South Africa. He reiterated that he had heard many complaints about the lack of co-ordination between departments, and he wanted to know the relationship like between DST officials (at lower levels) with their counterparts in other departments. The reason he was asking this was that he had found that many officials were not productive enough in the sense that they were so focused on serving their bosses and securing their jobs that they failed to recognise their responsibilities to communities.

Mr M Muofhe said the questions would be answered as fully as possible. He pointed out that Mr Mathele's questions on manganese would be answered at a later stage because the DST was currently busy with initiatives on manganese.

Mr Beeuwen Gerryts, Chief Director: Systems, DST, explained that he and his colleague Ms Cordelia Sita, also a Chief Director, DST, both worked with industry. According to the latest R&D survey, the private sector investment was declining and government investing was increasing, and this had been a concern for DST. However, the DST did have a number of initiatives to get the private sector to partner with it in order to achieve relevant research and not wasteful expenditure or research that was interesting but was going nowhere. One such initiative had been the commercialization framework, which was similar to the Innovation Bridge in that both were involving the private sector in potential development.

With regard to the titanium presentation there was a reference to this being "radical technology" which entailed doing something substantially different, which was high risk. In these high risk areas, the private sector was reluctant to invest, because even though there may be high pay-offs, there was also a potential to fail, and there were other investments which were safer for them. The role of government had therefore been to take on these high-risk activities. Because they were radical and used new technology, there was uncertainty with regard to the market. Techno-economic and market forecasts were done, and in the document there were three possible scenarios in terms of potential pay-offs.

Mr Gerryts added that there was another project around additive manufacturing and 3D-printing, which uses powder technology, which was also radical technology as it went through a machine that was more than three times the size of existing machines. The goal was to go more than five to ten times faster than existing machines. This would unlock a whole new market, in a sense that there could be printing of large components for, for example, cars. This would be large scale printing with much reduced wastage. There had been an ongoing quest to get private investors in, but in high risk areas the Department had had to be bold and lead in terms of beneficiation.

With regard to the IPAP and the contribution to the dti, there had been a fairly close relationship with that department and Chapter 3 of the IPAP on innovation and technology. There had been specific information about the interface between the two departments, the commercialisation framework and coordination of the incentives, because there had been awareness of shrinking funds. That was the reason for various interdepartmental objectives to try to maximise what resources existed. An example would be with aerospace, where a joint aerospace team committee was formed, which consisted of all the main government players like Departments of National Treasury, Transport, Public Enterprises, Trade and Industry, DST and Defence.

He added that there was already a government industry forum in R&D to try co-ordinate what DST does in order to maximise investments and also to align in that domain. Going further on the specific dti relationships, there were bilateral and joint activities pertaining to IPAPs. In some areas there was more success than in in others. However, in the broader sense there was a great cooperation - specifically when it came to areas like communications and technology and advanced materials, advanced manufacturing, aerospace, defense, bio- tech.

His colleague would talk to the energy side. However, even on beneficiation, the dti would lead the task team which identified the primary metals for beneficiation. The DST was part of that task team and where there were talks around titanium, iron, steel and pollen, DST was intensively involved. Other areas have been chemicals and pharmaceuticals, Ihlapela and the Fluorine chemicals. Whilst there was no doubt that more could be done, there was no major concern because the relationship with dti seemed to be on a good footing.

Mr Gerryts addressed Mr Kekane's question why the COCs were not budgeted for. The DST had allowed them to develop as a bottom-up approach, where DST did not want force a solution in terms of structure and where COCs would be more of a collaborative network, which was why it was not formalised. The initial report with the Department was done as a preliminary internal investigation, but there had not been a formal monetary and evaluation exercise to look at the heart and values of the COCs vis-a-vis the Australian Cooperative Research Centres. At one point there were talks around replicating the Australian model. However, this was difficult because in the current tight economic times, industry had cut back on their R&D budgets. Whilst the private sector’s increased participation would be welcomed, it must be accepted that involvement by the DST was an inevitable development.

Ms Cordelia Sita, Chief Director, DST, firstly addressed the question about at what point industry would enter. It had been a blessing, in respect of the COCs presented earlier by Mr Muofhe, that industry had come in at an early stage and she outlined that PetroSA donated R10 million, which was considered a ‘big chunk’.

Mr Mathale interjected, pointing out that PetroSA was actually a parastatal and not a private company.

Ms Sita said that the DST still considered it to be a private investment. The next investor was AngloAmerican Platinum, which also donated a big chunk of money, from a research and development side, and for commercial. On the research and development side, DST received R6 million, which was divided between two different COCs. Impala Platinum that donated R2 million rand over a three year period.

Mr C Mathele interjected again to say that R2 million investment over three years was actually very little.

Ms Sita added that in addition to that R2 million, Impala Platinum also contributed their human resources like engineers and scientists to work hand in hand with HySA Assistance and the COC.

Ms Maseko asked whether, in addition to Impala providing human resources, it had also provided or allowed use of technology.

Ms Sita confirmed that technology was used. She said that industry would tend to participate when it could see value in the research and development that was being done. As was seen in the presentation, Impala Platinum has the intention of also converting their forklifts to run on hydrogenic fuel. It was thus particularly interested in the hydro storage material in the collaboration where it had funded the R2 million. So Impala was not funding as an arm’s length funder, but rather they were and are absorbers of the technology and they intended to convert most of their fuel source into hydrogen power. As for Anglo Platinum, this company also wanted to convert its locomotives into hydrogen powered locomotives. The helmets that miners wore, underground, were being manufactured by using clean technology, which tied in with the manganese story, which would be explained later.

She added that in addition to the funding, for R&D, from local industry, there had also been funding from some international players which were mentioned by Mr Muofhe, who highlighted the Airbus collaboration. There was another amount received from Airbus to extend the research and development. On a commercial level, industry had come, as a commercialisation partner in terms of having a market abroad for these technologies, and there had been value in the research and development that had come out of COCs. There had been a lot of commercial players who had partnered with the COCs to actually take products to market. There had been local companies that had come in as service providers to COCs, like PF Design in Stellenbosch, with mechanical engineering capabilities. Here, the COCs designed the machines that they used for prototyping because some of them could not be bought directly, and some of the companies build the machines to spec. The Portfolio Committee was at Hysa Assistance and the MEA pilot plant was designed and built in South Africa, which was indicative of the fact that South Africa had those capabilities.

Ms Sita explained that Hot Platinum also came in as a manufacturer but skills had to be transferred from the COC to the manufacturer because there were different skills that complemented each other. This illustrated that there were different kinds of relationships with industry.

Answering the question about the relationship with other departments, she noted that the Chief Directorate for Hydrogen and Energy had a very good relationship with most of the departments that were relevant to the work that was done by the DST. There was participation when it came to the bilateral agreement between DST and the dti. There was a specific interest in the Platinum Valley that was being developed in collaboration with the dti. The whole point of the Platinum Valley is that it and the Special Economic Zones would encourage the establishment of an industry cluster in the area of hydrogen and fuel cells.

She added that there was, in addition, a Fuel Cell Task Team using inbound technology, for companies who come into South Africa wanting to set up their manufacturing facilities. The DST would try to become close to them so that that the DST could convey the technology that existed within South Africa, so that COCs could be integrated or work together with those companies.

She too spoke to the question asked earlier about why COCs were not budgeted for. With some of the COCs it was not so much a matter of funding but rather of IP transactions that needed to be budgeted for, and this had happened because of the international companies that had also been involved, and it was being dealt with. The Advanced Battery COC had not been established but there was a programme in place where a number of institutions were working together. The battery pilot plant at the University of the Western Cape was part of the Advanced Battery Centre of Competence, but has not been upgraded as a Centre of Competence. However the programme had produced good results.

The Renewable Energy Hub was not yet a Centre of Competence but there were programmes in place at the University of Stellenbosch, the University of Cape Town and the University of Fort Hare looking at Solar, PV, concentrated solar and wind, to answer the comment about wind power. There was also a wind farm about seventy kilometres from Cape Town, and there was a demonstration plant by ESKOM, which was currently on five megawatts but the goal was for it to reach thirteen megawatts. Those technologies were being looked at. The Solar Corridor Energy in the Northern Cape, once completed, would be five gigawatts. There was also participation in providing measuring stations on the ground and in providing solar radiation atlases. This was some of the work in renewables being done by DST.

She answered the question of using sugar cane waste to generate energy, by noting that there was a recent development of a bio energy atlas that looks at the waste to energy and how much waste there is to use, where it is located and what can be done about it. The DST had focused on second generation bio fuels, because there were issues around the energy: food nexus and the competition between food feed stocks into energy. There was research into providing feed stocks which were not necessarily food related. There had been a lot of work done by the Department around this.

The question on beneficiation and the 80% manganese was answered by looking at the HySA COCs, which were an example of beneficiation of these metals. The Advanced Metals Programme was supposed to be conceptualised as a COC, and was in the process of becoming one. It was in the process of looking at Lithium iron batteries for different applications. It was not presented in this briefing, but work was being done.

Mr Muofhe said that the DST and Committee were fully in consensus on the concerns about the private sector and R&D. The R&D incentive had been quite popular, and maybe even oversubscribed, because there were a lot of applications which were dealt with on a daily basis. The figures were of concern because the figures were actually quite small.

He also touched on the Innovation Bridge, saying it was basically a platform to create awareness about state-funded and developed technology, and a platform to market technologies that were developed or were currently being developed. It enabled different actors to become involved in these technologies. Such technologies were available and could assist, for example, in improving service delivery. This platform was also intended to create awareness amongst investors who would like to invest in technological initiatives and developments.

Mr Muofhe spoke to the question how much titanium was leaving South Africa, referring to the graph on page 48 of the presentation. He conceded that a lot of titanium was going out without beneficiation. There were partnerships with the SAPS design projects and TIA was one of the partners. It was believed that TIA would not be able to continue with that partnership, due to funding issues, but there would still be official confirmation.

Mr Muofhe also spoke to the issue why the framework was not budgeted for. He explained that sometimes there was a toss-up of whether to create the plan first and then get funding, or first getting funding then creating the plan. With COCs, it was considered that creation of the Framework first was more critical. COCs were the best way of beneficiating the resources that the DST had, taking it also beyond resources but also to opportunities for research and development through the COC. Part of the plan could be funded, but most could not. DST had a plan as to where it wanted South Africa to go and how it wanted to use that plan to mobilise resources. The internal evaluation was to see how the plan performed. The external evaluation served the purpose of having an objective actor to come in and be critical of the plan and of how it was executed by the DST. This served the purpose of getting external help on seeing the shortfalls of DST and the potential avenues to improve.

He noted that DST drafted the Framework itself and this was on the basis of various interactional lessons that had been learned. The aim was to find out how best to support the ten year innovation plan going forward, and looking at the sub activities and sub programmes that needed to be in place. The COC would have then help to close the gap of the innovation column. There was a realisation that without the partnerships with industry and public actors in the public sector, that gap could not be closed.

On the issue of intellectual property (IP), Mr Muofhe agreed that there had been difficult lessons learnt from the past but the first thing that was done when getting into a partnership was to make sure the IP is protected.

Mr Muofhe also expanded upon the answer of use of sugar cane. There was a programme under way to assist in ensuring that sugar cane farmers would harvest their crops and feed the waste into the energy generation industry. The DST was looking into establishing bio refineries that can utilise these feed stocks into various industries, so this was part of its work in the bio economic strategy. If it was done right it enabled these industries to be completely independent from the grid, and even sell into the grid, with very little bio mass. The goal was to make sure that these facilities were available to be used on sources, to create employment and also to ensure independence for energy generation.

Expanding on the question around beneficiation, Mr Muofhe said there had been a lot of mining of manganese in Mpumalanga and the company that was mining would sells to another company which transported it by road from Mpumalanga to Kuqa, and from Kuqa to China. The DST was told that it is was much cheaper to transport from Kuqa to China than from Mpumalanga to Kuqa, and the costs were just too high to do it another way. This has meant re-looking at the effectiveness of the rail system. There had been an engagement around beneficiation, and while these companies would be selling a lot of their production sites, the DST would be acquiring the laboratories and the pilot plants, which would help towards beneficiation. Manganese was a very useful component and if manganese was beneficiated locally it would make a huge difference. He added that it was sobering to see the figures on how much raw material was being sold, and how very little beneficiation there had been. The pilot plant that was being acquired was going to be set up so that that the work that the DST wanted to get done could actually be done, and so that towards the end of the five year term, there could also be commercial activities coming out of that plant. DST was aiming to finalise those plans by the end of the month with Delta EMD. It made sense for South Africa to not just sell raw products and buy it back again at ten to twenty times more than the actual sale price. He hoped that this would also help in creating employment, particularly for young people. The pilot plant would hopefully absorb many of the science graduates. There would be quite significant impact and opportunities created by the plant in Mpumalanga.

Ms Maseko asked about the Flouro Chemicals which were near commercialisation, where the business plans were already submitted. She asked who the beneficiaries were, and who were the role players?

Mr Gerryts said South Africa had the capabilities of handling fluorine and by using the fluorine process the downstream products could be generated. The pilot plant had been completed and that had enabled Pelkin, which is an operating unit of NECSA, to produce small amounts of samples. The bottleneck for growth and scale up was the ability to manufacture hydrogen fluorine (HF) gas. There was a 5 000 per annum plant at Pelkin. In order to have a full downstream beneficiation, there needed to be at least a sixty thousand tonne plant, which would cost a couple of billion dollars. However, the problem was that once it had been beneficiated past that level the products could not be exported because they were corrosive and chemically poisonous. At the moment, it was easier to simply export in a very safe format. The plan going forward had been to focus all research on marketable products from a small volume with a five thousand tonne per annum HF plant.

The next scale up plan is a ten thousand per annum plant which would enable a capture of a bigger market but still small scale niche specialty chemicals, which were used in antiretrovirals (ARVs) and gases for electronic equipment. The dti was leading a team, finding overseas or local investors that were willing to put up the fifty or sixty thousand per annum HF plant, and the associated downstream industries. That had been a joint activity led by the Industrial Development Corporation, with the dti currently taking the lead, but in the meantime the DST was also continuing its own R&D with more focus on marketable products rather than the high pay-off path. The primary technology development was at Pelkin, but most of the chemicals were exported.  Lynda, NECSA and Sibakhu were also involved. There were discussions on scaling up in the future.

The Chairperson commented that more engineers and scientists were needed so that these initiatives were taken forward. There must be a comparison with other countries, DST must look at what they were doing and how they were improving and transforming their own country’s situation. There seemed to be a lack of awareness to how important DST was in making these initiatives. Lack of funding had to be addressed and re-assessed. Incentives for the private sector must also be re-assessed and, moving forward, it would have to be convinced to make investments that would help to lower the risks. The key areas had been universities in certain areas, but there should also be a focus on rural areas as well, in order to ensure that development and opportunities were widespread and not concentrated.

The meeting was adjourned.

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