MOVING BEYOND PIT-TO-PORT HOW WE CAN ENGINEER SOUTH AFRICA'S MINING BENEFICIATION FUTURE

MINING MOVING BEYOND PITTOPORT HOW WE CAN ENGINEER SOUTH AFRICA'S MINING BENEFICIATION FUTURE Chris Campbell CEO of Consulting Engineers South Africa By Chris Campbell, CEO of Consulting Engineers South Africa CESA South Africa's mining sector has long relied on a pittoport model extracting raw minerals and exporting them with minimal local processing. While the argument against this method is nothing new, and while it has sustained the industry for decades, it severely limits economic multipliers, job creation and fiscal resilience. This year, we need to see a decisive shift toward beneficiation, which will include building local infrastructure, processing facilities and value chains where South African engineers lead the design, risk management and implementation to unlock sustainable growth, higher revenues and broader employment. PITTOPORT LIMITATIONS The status quo is increasingly unsustainable. Exporting raw chrome ore or other commodities at low value often around R48 per tonne for certain ores only to import highvalue finished products squanders our natural endowment and economic potential. Recent data from Statistics South Africa underscores this fragility. Mining production surged yearonyear in October driven by commodity price momentum, but then declined yearonyear in November with coal, iron ore, platinum group metals, and gold weighing heavily. High energy costs, logistics bottlenecks, and policy uncertainty continue to threaten smelter viability and jobs. In a recent critical development, energy regulator Nersa approved Eskom's application to lower the tariff for GlencoreMerafe and Samancor ferrochrome smelters from kWh to 87c kWh, effective from January to December This move is aimed at saving thousands of direct and indirect jobs in up and downstream value chains. While this discount is a welcome boost to our economy, one can only wonder how the costs will be recovered. BENEFICIATION IMPERATIVE With this new push, the upside is clear processed ferrochrome, for instance, can fetch R1 per tonne or more, dramatically expanding the tax base, creating skilled jobs, and supporting downstream industries if it is beneficiated on local ground. While government has repeatedly emphasised this, including through the Critical Minerals MINING Strategy and public statements on value addition, we need to now see action, from both public and private spheres. Surging precious metals prices in late are generating a potential R350billion revenue windfall for miners, providing a narrow window to reinvest in local processing rather than raw exports. We must target highdemand minerals like manganese, vital for steel and batteries, PGMs and gold, building incrementally from primary beneficiation to refined products. Recent developments offer encouragement, such as the commissioning of Qala Shallows in October South Africa's first new underground gold mine in over years. This demonstrates that revival is possible when investment aligns with global price tailwinds and operational readiness and further highlights the potential for renewed exploration and production if we address barriers systematically. GOVERNMENT'S ESSENTIAL ROLE Political will is now needed to make beneficiation happen to optimise Eskom's performance, accelerate independent power producers IPPs and potentially pursue small modular nuclear reactor options that have a longer lifespan, are safe, are cost effective and are scalable to provide stable baseload power. We must ease exploration by sharing risks with empowerment partners, decisively tackle corruption, and prioritise national interest over shortterm gains. All factors that detract from these objectives, including regulatory delays, policy uncertainty, and infrastructure gaps, must now decisively be managed out. Logistics is another critical enabler. Transnet's Memorandum of Understanding signed on January with the Port of AntwerpBruges and APEC is a positive step toward modernising our ports, which will ease current export constraints, but it must be viewed as a foundation, not the end goal. True beneficiation requires reliable pittoplanttomarket pathways, where raw materials stay incountry for processing before export. ENGINEERS AS CATALYSTS This is where CESA member firms come to the fore. Consulting engineers excel at designing resilient infrastructure, conducting rigorous risk analysis, and delivering complex projects. At government level, our engineers partner with other specialists to enable these developments as well as plan and design supporting infrastructure that would be required for both the mining complex as well as the beneficiation plants. We also need to inspire the next generation. Mining and beneficiation engineering as part of a broader industrialisation strategy will be able to offer exciting career paths to retain homegrown talent and reduce overreliance on foreign skills. Events like the Mining Indaba provide the ideal platform for our country's engineering talents to showcase these opportunities, positioning engineers at the heart of South Africa's resourceled growth story. The year has started on a positive note for our mining industry and there are signals of momentum amid these ongoing challenges, but momentum alone is not enough. By committing to beneficiation, backed by political resolve, reliable energy, modern logistics, and worldclass engineering, we can transform our mining sector from raw exporter to global valueadder. SWM Communications Downtime is more than Delay Proactive protection safeguards output, assets and people eCastrol Protect the Journey