M Mangena: Precious Metals Development Initiatives Strategic
Discussions

1 August 2006

CEOs of the Gold and Platinum Mining Houses and their representatives
Distinguished guests
Ladies and gentlemen

Let me begin by thanking you for taking the time to participate in this very
important discussion between my department and key leaders in our Gold and
Platinum Mining industry.

South Africa has an extremely rich and diverse mineral resource base that
could provide the platform for industrial development. We are currently one of
the world’s major producers of gold and platinum. However, although we produce
and export a large chunk of our gold and platinum, we have failed to ‘latch on’
and develop a growing precious metals beneficiation industry. Currently, we
export the bulk of the raw product and import the processed goods back at a
much higher price. As a response to this anomaly, government and Mintek have
stepped in to work out ways of developing and supporting a precious metals
beneficiation sector.

There already exists a suite of interventions to strengthen and support
R&D within the gold and platinum sectors. However, it appears the industry
is not yet fully conversant with this suite of interventions. This further
reinforces the significant benefit that could be gained from a directed
engagement between my department and CEOs of major mining houses.

Discussions in this regard have culminated in my department initiating a
proposal to combine Project AuTEK (which focuses on gold) and the Platinum
Development Initiative (which focuses on platinum) to the CEOs of six major
mining houses in South Africa, and to look at ways in which industry and
government can work together to enhance this joint initiative.

Significant progress has been made since the establishment of the Project
AuTEK and the Platinum Development Initiative Programmes. The budgets have
increased more than 15-fold and the human resource development more than
10-fold to about 70 researchers. Our research and development (R&D)
expertise in precious metals is being built by involving local universities and
establishing strong collaborations with international universities and
laboratories.

This initiative will impact positively on our human resource development,
the expansion of the country’s technical capacity, and the development of new
applications for precious metals, which will in turn spawn new local industries
and broaden the usage of precious metals into more diverse industries. The
initiative will, as far as possible, also attempt to create and retain the
precious metals value matrix and intellectual property in South Africa.

New technologies and applications for precious metals are of utmost
importance to the economic growth of the mining sector and the country. We need
to develop the critical mass of human capital required to build the identified
research platforms to feed into a sustainable precious metals beneficiation
industry. To do this effectively, government needs to partner with the precious
metals producers in order to identify the R&D focus areas that have the
highest potential for success, and to develop these actively into a sustainable
precious metals industry in South Africa.

As a country we are increasing the national R&D spending and hope to
meet our target of one percent of GDP by 2008. We are, therefore, committed to
retaining some of the precious metals value matrix in South Africa by
identifying, researching, developing and promoting new technologies and
applications to a precious metals beneficiation industry in order to support
the long-term future development of the mining industry. We thus need to ensure
the implementation of active and effective R&D and innovation processes,
where good ideas can be transformed into economically and socially valuable
products.

So let us consider in a little more detail what our position on the precious
metals beneficiation entails.

As a government, one of our key responsibilities is to improve the
well-being of our people through sustainable development. Science and the
associated technological developments are recognised as part of a toolset
capable of providing tailor-made solutions to address key opportunities for,
and problems of the nation.

The purpose of research is to generate new knowledge. And new knowledge not
only allows us to better understand the nature of our environment; it also
enables us to better manipulate, use and manage the environment to our
advantage. Research has become a commodity and an agent for change. In a fast
changing global economy, no institution or country can survive unless it meets
the demands set by the local and global community.

Research and development is becoming increasingly important for the
sustainable development of society. Science and technology is also clearly
recognised as an essential component to future economic development, and to the
development of a knowledge society. As government, we are committed to
increasing the investment in our future, particularly in science.

Ladies and gentlemen, allow me to briefly outline the key points of our
discussion today which centre around sharing ideas on how we can partner
to:

1. Positively impact on the human resource development and expansion of the
country’s technical capacity.
2. Increase the usage of precious metals in new applications and more diverse
industries.
3. Develop new local industries.
4. Create and retain the precious metals value matrix and intellectual property
as far as possible in South Africa.

This strategic discussion aims to position our country as a key player in
the area of precious metals beneficiation, and seeks to support and strengthen
an integrated development focus. We recognise the need to create opportunities
for human capital development and develop the research and development
infrastructure. This is our motivation for promoting the R&D and innovation
in the precious metal beneficiation.

We need to recognise from the beginning that while government is committed
to developing a precious metals beneficiation industry for South Africa, it can
only do so through meaningful partnerships with its key role players. We need
to maximise the use of our own intellectual property. And to realise business
opportunities, we must invest in technologies that will enable us to
commercialise products in the global arena.

May I, in closing, reiterate the need for precious metal beneficiation
particularly in the social context? Some of the desired outcomes from
developing this kind of industry include the generation of new export revenues,
the eradication of poverty through the creation of new local jobs, skills
development, lateral migration into other sectors, maintenance of excellent
infrastructure where it exists, the creation of new ones where required, and
other socio-economic spin offs. We need the engagement of industry with the
rest of the national system of innovation to grow a distinctly South African
opportunity in precious metals beneficiation.

For social benefits to grow, precious metals beneficiation should become one
of our priority areas. As a department we are determined to give our local
sector every opportunity to mature. Government has clearly demonstrated its
commitment to creating the best possible climate for innovation to thrive.

I thank you.

Issued by: Department of Science and Technology
1 August 2006
Source: Department of Science and Technology (http://www.dst.gov.za)