OVERVIEW demand from the fuel cell industry will replace the decline in demand for catalytic converters. Other areas that are being investigated are jewellery, where the Platinum Guild International will try to stimulate more demand. Coal and platinum group metals (PGMs) have overtaken gold as the minerals generating the biggest sales volumes. Coal, iron ore, gold and platinum group metals collectively make up 80% of South Africa’s mineral sales. South Africa is the second-largest exporter of steam coal in the world and is the number-one producer of andalusite. Copper mines in Aggeneys in Namaqualand are responsible for approximately 93% of South Africa’s lead production and 12% of all world lead exports. There are 20 chromite mines in the North West Province located along a reef running from Brits to Rustenburg and serviced by several ferrochrome smelters. The Northern Cape produces more than 84% of South Africa’s iron ore. Kumba Iron Ore is the country’s biggest iron-ore miner. Its two mines (Sishen and Kolomela) produced 69.8-million tons in 2016. The company’s Thabazimbi mine was sold to ArcelorMittal South Africa in 2017. ArcelorMittal also stepped in to keep the structural mill of Evraz Highveld Steel in Mpumalanga running. Evraz Highveld went into business rescue in 2015. Assmang (a joint venture between Assore and African Rainbow Minerals) is the other big iron-ore producer. Analysts at Investorintel.com expect the South African ferrochrome market to be dominated by two major players, Samancor and Glencore. This follows the closure of three operations: Tata (in KwaZulu-Natal), International Ferro Metals and ASA Metals. Mitsubishi has said that it wants to sell its shareholding in Hernic Ferrochrome. Afarak and Traxys are smaller operators in the sector. A new iron-ore sampling plant at Saldanha, a joint venture between Kumba and Transnet, allows exporters to certify the quality of their product before the ore is loaded on to ships for export. The Kalahari Basin contains 80% of the world’s manganese reserve, but only 15% of global production comes from this area so there is enormous scope for development. Several new black-owned manganese projects are under way. Vedanta started work in 2015 on its R9.4-billion Gamsberg Zinc project. The new mine is near to Vedanta’s existing Black Mountain mine in the Northern Cape Province. ONLINE RESOURCES Chamber of Mines of South Africa: www.chamberofmines.org.za Geological Society of South Africa: www.gssa.org.za Mining Qualifications Authority (MQA): www.mqa.org.za National Department of Mineral Resources: www.dmr.gov.za South African Institute of Mining and Metallurgy: www.saimm.co.za Anglo American is investing R2-billion to expand production at its diamond mine near the town of Musina in Limpopo. In the Free State, De Beers’ Voorspoed mine will have a production capacity of 800 000 carats per year when it is fully operational. A new mineral sands project on the West Coast near Lutzville and Koekenaap has started sending product to China. Australian miner Mineral Commodities says it will spend R5-billion at its Tormin mine to 2019 in search of zircon, rutile, ilmenite and garnet. Sixteen rare earth minerals have been identified north of Vanrhynsdorp, with the most prevalent being cerium, an important component of catalytic converters. South Africa is a world leader in converters. Other minerals found at the site are used in magnets, batteries and electric-powered cars. SOUTH AFRICAN BUSINESS 2018 68
Oil, gas and petrochemicals The sector is alive with activity. OVERVIEW Licences for onshore and offshore exploration for gas, allocation of sites for liquified national gas power plants, the creation of new units within national departments, investment in a new helium plant, testing for shale gas, massive investments by Sasol – these are some of the things that are putting a spark into the South African oil, gas and petrochemicals sector. An agreement has been signed between PetroSA and Russia’s geological exploration company, Rosgeo, which will see 0-million invested. The agreement relates to offshore exploration blocks which, it is hoped, will deliver four-million cubic metres of gas every day to the gas-to-liquids refinery at Mossel Bay (Mossgas). The refinery has been struggling to find new feedstock for some time, and a great deal of money was spent on a project called Ikhwesi, which was supposed to find gas. The South African oil industry generates annual sales of about R365- billion. Companies in the oil sector include global giants such as Engen, BP, Shell, Total and Caltex. In 2016 Chevron began the process of exiting South Africa. Sinopec of China has bought a 75% share in Chevron SECTOR INSIGHT A Russian exploration company will supply gas to Mossgas. • A R200-million helium plant is under construction. South Africa for R12.6-billion. Assets include a lubricants plant in Durban, an oil refinery in Cape Town and 820 petrol stations across South Africa and Botswana. South Africa’s own global giant, Sasol, is a major player in the oil sector and the only player in the petrochemicals sector. 69 SOUTH AFRICAN BUSINESS 2018
SOUTH AFRICAN 2018 EDITION BUSINESS
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SOUTH AFRICAN BUSINESS 2018 12
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