Mining Phakisa; DST International Cooperation and Resources Programme: Department briefing

Science and Technology

06 June 2018
Chairperson: Ms L Maseko (ANC)
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Meeting Summary

The Department of Science and Technology briefed the Committee on the Mining Research Development and Innovation Programme and Phakisa. A disappointing announcement was made that South African mining was in crisis. Post Mining Phakisa represented some of the following: No significant price movement; Cost increases were greater than the Consumer Price Index; and the curtailment in the life of mines. The solution to all this was modernisation of mining through optimisation and innovation that was inclusive but not limited to mechanisation and automation. The situation regarding the Mandela Mining Precinct & Hub was reported on.

Members asked a series of questions on localisation and beneficiation could also include local people; If the country was not too far behind to restore competitiveness; if the Department had come across any corruption with regard to procurement of manufacturing equipment; the progress on retrieving the three bodies at Lily Mine; and if mining was in trouble, plateauing or if it was just ageing.

The Committee was briefed on the International Cooperation and Resources Programme on agreements and areas of cooperation with South Korea and Japan in relation to the proposed international study tour. The Department of Science and Technology had a dedicated strategy for international cooperation with other countries by leveraging foreign investment in South Africa with international partners.

Members asked for the tangible outcomes of its relations with Japan and Korea and heard about the Hitachi Scholarship Programme which targeted mainly engineers who then studied in Japan for a period of six months.  There was also a Climate Change Project that had cost more than R10 million which focused on the mining sector. The Hitachi Programme also had a Centre being run by the Durban Municipality for desalination of sea water. The Committee also wanted to know the age and qualification requirements for the Hitachi DST Scholarship Programme.

Meeting report

Mr Imraan Patel, Deputy Director-General (DDG) Economic Innovation Partnerships: Department Science and Technology (DST) said two presentations had been prepared. One was on Mining Phakisa and the other was on Japan and Korea which was based on the fact that the Committee would be travelling there next week. There was also a request earlier for information about what the Department was doing in relation to Jamaica and Cuba. If there was time then this could be done.

Briefing by the Department of Science and Technology on Mining Research, Development and Innovation (RDI) Programme

Mr Beeuwen Gerryts, Chief Director: DST, said South African mining was in crisis. Post Mining Phakisa represented the following:

  • No significant price movement;
  • Costs increases greater than consumer price index (CPI)
  • Continuing productivity decline;
  • Capital delays;
  • Operations on care & maintenance;
  • Curtailing in life of mines; and
  • No step change improvement in safety.

The solution to all this was modernisation of mining through optimisation and innovation that was inclusive but not limited to mechanisation and automation.

Mr Gerryts said that the South African Mining Extraction RDI (SAMERDI) Strategy had as its aim “To maximise the sustainable returns of South Africa’s mineral wealth through collaborative research, development, innovation and implementation of mining technologies in a socially, environmentally and financially sustainable manner that was rooted in the local community and national economy”.

Mandela Mining Precinct & Hub
The Mandela Mining Precinct is being established as a public private partnership between government (DST, DTI), the mining companies (Chamber of Mines), manufacturers of mining equipment (Bell, AARD, Joy and HPE), research organisations (CSIR, Mintek & CGS and academia (UPS, Wits, UJ) to foster collaboration and innovation.

  • Mining R& D will be coordinated through the Mandela Mining Hub – hub & spoke model;
  • The Mining Hub will be housed in the Mandela Mining Precinct;
  • The Mining Hub will have a Research Advisory Steering Committee (RASC) – with a governance & oversight role; and
  • The Mining Hub management processes were in the process of being finalised.

Mr Gerryts said that investment in mining RDI was essential to strengthen competitiveness of Mining Equipment Manufacturers. The building blocks for a successful RDI partnership had been established. The SAMERDI Steering Committee was operational.

The next steps for the process were:

  • Manage RDI for maximal impact on mine survival and competitiveness;
  • Start the groundwork for a dedicated Mining RDI science council;
  • Further expand collaboration & coordination with Mine Health & Safety Council – to ensure maximal utilisation of investments.

(See document Mining Research, Development and Innovation Programme)

Discussion
Ms A Mfulo (ANC) said most of her questions were related to localisation and asked the following:

She referred to pages two and three regarding ‘the number of instruments in support of increased localisation…’ and asked for clarity about this.

She referred to page 4 and asked how modernisation was going to affect communities.

She referred to page 14 on localisation and procurement and asked how important it was to procure locally.

Ms Mfulo referred to page 16 - investment in mining - and asked how one could make sure that beneficiation also included local people.

Mr Gerryts said that what was found with Phakisa was that the concept of localisation had different meanings, in the Department it was often understood at national level and at the mines it was referred to as ‘the shadow of the headgear’ – and this was the localisation. The important lesson was that the mines said that in the next generation it was not quite robots that would mine but remotely operated mechanisms, like an Xbox device; and if the local community did not have electricity or were not familiar with an Xbox then those persons would not be selected to operate equipment. This forced the importance of having electricity, communal centres with ICT and this even in the deepest rural centres. There was therefore a need to push for a whole country upgrade in terms of the next generation of ICT involvement.

The concept of community involvement, especially also empowerment, was definitely being addressed through the DTI (Department of Trade and Industry) in terms of equipment manufacturing.  Their support was always conditional, for example they would help the company to grow its export base if it expanded their supplier base with black partners to facilitate transformation.

What was amazing was that in a supply chain study done at the mine was R2.5 million buying lines that were analysed in terms of what was purchased and where – the value of that was that what was seen was a long line of line entries which allowed one to by-pass the system by using part numbers. This approach – using part numbers – opened the way for many suppliers to strengthen local production. The fact that the mines were starting to buy into this was a big step forward. Statistics on values was that 60 to70% of all valves were purchased locally.  If all mines bought into this, these percentage values meant that a local market was then created and this would be a huge step in creating a local market. Currently there were three big mines which were voluntarily doing this exercise as part of the initiative. It would be good if the Committee visited the Mining Precinct then discussions could be had around the details of manufacturing equipment to ensure that benefits accrued to all.

Mr N Koornhof (ANC) asked if we were not too far behind to restore competitiveness in South Africa?

Mr Gerryts said that the big difference between South Africa and Australia was that Australia dealt mainly with Open Pit mining. This kind of mining was very easy because it used GPSs and satellites. With South Africa miners has to go 4km underground and use their own positioning system, so here it was a totally different environment and some miners have at their own cost developed new novel equipment like developing trackless systems. Hence it was not too late because South African mining companies had developed a niche.

Mr Koornhof asked if the Department had come across any corruption with regard to procurement of manufacturing equipment.

Mr Gerryts said he could not comment on corruption with regard to procurement of manufacturing equipment

Ms S Thembekwayo (EFF) referred to pages 12 and 13 read concurrently and asked what the progress on retrieving the three bodies was.

Mr Gerryts said part of the problem was that it was not known where the miners were and the area was a very unstable rock environment. They were not involved in the operation because they were more involved in the technology side.

The Chairperson said that the third bullet on page 2 ranked South Africa seventh in terms of global AU (African Union) production.  She asked if this was in the African Continent or in the World.

Mr Gerryts replied that the ranking was in the world.

The Chairperson requested that the Committee be provided with a list of all the rankings so that it was clear where South Africa stood in comparison with the rest of the world.

The Chairperson asked if mining was in trouble, plateauing or if it was just ageing.

Mr Patel said that the mining arena was quite broad. The strategy was really about gold and platinum because this was where efforts were being deepened. The future of mining depended on its stakeholders and the decisions they made. The degree of mechanisation in mining also influenced the choices society made.

The Chairperson said joint meetings had to be held with other departments especially the Department of Minerals and Energy.

Mr Patel, on skills, said he could say with a fair degree of confidence that no other country in world had grappled with what the Industrial Revolution really meant and how to change our skills system and education like South Africa had. This was a very difficult issue; however South Africa had started to look at this very carefully. The Human Development Council had begun to focus on this. When speaking about Industry 4.0 one needed Education 4.0 and to rethink one’s education system from the core. With mining qualifications in place hopefully skills development could be influenced positively.

Questions asked but not answered
The Chairperson referred to page 16 where it was stated that the ‘SAMERDI Steering Committee is operational’ and ‘the formal DMR (Department of Mineral Resources) invitation for representation had been sent’; and asked why the invitation had been sent so late.

The Chairperson referred to page 2 where it was stated that the GDP had dropped from 21% to 8% in 2016 and she asked where the country was now in relation to this.

Brief by DST International Cooperation and Resources Programme on agreements and areas of cooperation with South Korea and Japan in relation to the proposed international study tour

Ms Punkah Mdaka, Director: Overseas Bilateral Cooperation, DST, said that the main objectives of this section of the Department were to increase knowledge generation, human capital development and knowledge utilisation for inclusive development. The new White Paper while in preparation was on hold for now. There was a dedicated strategy for international cooperation with other countries by leveraging foreign investment in South Africa with international partners.

Signed an international agreement with South Korea with the following areas for collaboration:

  • Nano technology
  • Space science and astronomy and
  • Information and Communication technology

Ms Mdaka said it was very important to partner with the Koreans because there was so much to learn from them. DST had a joint Committee meeting with the Koreans last year and planned to launch a call for proposals on 12June 2018. The one new area of collaboration was artificial intelligence.

An agreement was signed with Japan in August 2003. The strength of the relationship with the Japanese was highlighted through cooperation through joint R&D projects with over R87 million in more than 60 projects.   Areas of cooperation were:

  • Life Sciences;
  • Environment and Climate Change;
  • Turbines;
  • Energy;
  • Material Science; and
  • Nano technology

(See attached report)

Discussion

Ms Mfulo asked what the tangible outcomes from these relationships were were with the Koreans and the Japanese.

Ms Bongi Mkhize, Deputy Director: Bilateral Relations (America and Asia) said that the Hitachi Scholarship Programme was one of the tangibles of the relationship with Japan. The Scholarship targeted mainly engineers who were already placed in areas like Eskom for example. The engineers would then spend six months training in Japan. Also, under the Hitachi Programme, there was a climate change project that had cost more than R10 million. This project was focused on the mining sector.  Also, under the Hitachi Programme there was a Centre being run by the Durban Municipality for desalination of sea water. A site had been identified for the building of a desalination plant.

The Chairperson asked what the age and qualification requirements were for the Hitachi DST Scholarship Programme.

Ms Mdaka said young students were taken with junior degrees and Honours and Master’s degrees, but more importantly technical people. They did not take more than five students per year.

The Chairperson said the issue of R&D was of primary concern for the Committee who was keen on National Treasury controlling this as opposed to the Department. 1.5% of GDP for R&D was key for the NDP. The Committee was trying to ensure a separate vote for R&D.

Dr S Thembekwayo (ANC) said important information should be provided on the slides rather than - as was given in this case - only when provoked with questions.

The Chairperson agreed and said that the Committee needed to know what questions to ask and the slides should have provided this information.

Ms Mfulo recommended that if for example the Japanese agreed to finance 10 students then South Africa should also finance 10 Japanese students so that there was reciprocity and true partnership.

Ms Mkhize said that when Calls were launched and people applied for their projects to partner with international partners, there were primary investigators who were PhD students and Master’s students because they would benefit more from learning in a particular field. The Japanese and South African students studied in each other’s countries, so there was already this kind of exchange.

The Chairperson thanked the Department for the presentation. The Committee was now aware of the challenges it could question when in Korea and Japan, and the position aspects of the current relationships with the two countries.

The meeting was adjourned.

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