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1 1 Research and Development South African Mining Industry Presentation to Parliamentary Portfolio Committee on Mineral Resources 10 June 2015 Prof May Hermanus 10 June 2015 Slide 2 2 2 Outline 1.The Mining and Minerals Sector 2.Research and Development (R&D) Capacity and Funding 3.Role of SIMRAC (MHSC) 4.Where to Mining R&D? 5.CSIR initiatives to Revitalise Mining R&D 6.Conclusions Slide 3 3 3 The Mining and Minerals Sector Slide 4 4 4 Key Points South Africa has significant mineral reserves Mature industry, with easily mined deposits / high grade deposits already extracted Challenges In mining operations one aspect of the legacy of our past is labour intensive mining long after changes elsewhere Reduced and fragmented R&D capacity No overarching strategy for the mineral value chain (DST, DMR and DTI strategies exist) The problems to be resolved by R&D have changed in focus and scope, and need to be addressed as a system Natural resource trade offs Slide 5 5 5 Minerals Endowment RSA has an abundance of wealth in mineral reserves USD 2.5 trillion (www.south africa.info and CGS) World Number #1 in: PGMs (87.7%) Chromium (72.4%) Manganese (80%) Titanium (65%) Gold (12.7%)) 5 5 Slide 6 6 6 Mining and South Africa Contribution to GDP 7% direct and 10% indirect (induced) Very labour intensive Estimated: one miner supports 12-15 dependents The NDP calls for increasing employment and growth in country. Mining (moreover the minerals value chain) has a critical role to play in the development of the country 6 6 Slide 7 7 7 Challenges in Mineral Extraction 7 7 Depth of mining & lower grade deposits Cost Considerations Increase in COSTS and RISKS associated with deep level mining Variable of commodity price Low productivity (mining methods and skill shortages) Natural resource trade offs (land use water, arable land, sterilisation of land, environmental impacts) New coalfields, limited infrastructure and high quality resources Slide 8 8 8 Challenges in Mineral Extraction www.i2mine.eu Slide 9 9 9 Mining Value Chain role players 9 9 Exploration to extraction to benefication The National System of Innovation supports R&D along the value chain through Government Departments (DMR, DST, DTI etc) and three Science Councils Traditional roles being defined as: Minerals value chain is more than these 3 areas! Slide 10 10 Mining Value Chain role of the CSIR Mining Research in the CSIR 10 Through a multi-disciplinary RD&I approach, a multitude of significant challenges can be addressed the CSIR, CGS and MINTEK as well the universities involved in mining (WITS, UP, UJ, UCT etc.) Slide 11 11 R&D in South Africa Capacity and Funding Slide 12 12 Mining Value Chain role of the CSIR Mining Research in the CSIR 12 Slide 13 13 Research and Development Capacity: Key Points 13 Exploration Extraction /Mining Beneficiation. R&D gap in middle No overarching minerals sector strategy, No overarching R&D Strategy (DMR, DTI, DST) Mining Phakisa /Mining Lab presents new opportunities Capacity and funding availability are inter-related No funding, no R&D But funding alone, cannot jumpstart R&D Human capital (experienced researchers) and funding required Long term projects replaced by short term projects Funding Patterns Government driven globally Private sector retreated from R&D, state not stepped in Slide 14 14 Research and Development Capacity 14 Capacity and funding availability are inter-related R&D capacity in South Africa peaked in 1989 at approximate 800 full time researchers, with 660 at the Chamber of Mines Research Organisation (COMRO) Overall mining (extraction) R&D strategy was held by the COMRO Steady declines in all the major disciplines of mining New focal points & issues emerged since Less than 50 people in full-time mining research, most at the CSIR Concomitant decline in membership of professional societies, e.g. South African National Institute for Rock Engineering, and the Mine Ventilation Society Both struggling to meet demand for members expertise Slide 15 15 Funding: Institutions and Sources 15 Exploration: CGS. In 2014: R290m in total with R270m in form of government grants Extraction: Uncertain, possibly of the order of R60m. Small initiatives (R25m from MHSC; 10m CSIR, private funding of university chairs and specific projects etc.) Beneficiation: Mintek. Of the order of R487m in 2014 of which R209 is in the form of government grants. Slide 16 16 Funding: Institutions and Sources 16 Extraction (Mining Operations) Collaborative Industry funding for productivity and environmental issues Virtually no collaborative research funding, as for Deep Mine, Future Mine, Platmine Coaltech: the only industry co-ordinated collaborative research funder, focus productivity and environmental issues Sector Level funding of Occupational Health and Safety Funding traditionally via MHSC SIMRAC in the region of R 25m per annum Down from R40m p/a MHSC Centre of Excellence not yet operating CSIR Grant funding from DST allocation to the CSIR ( R 10 million p/a focussed on HCD and generation of new knowledge) Industry funding Private funding on projects to universities Research chairs and collaborative programmes Wits Occupational Health, UP Safety Wits Centre for Mechanised Mining Systems, Centre for Sustainable Mining and Industry (project funded) Slide 17 17 MHSC / SIMRAC Mine Health and Safety Council funding predominantly for OHS research OHS and mining / processing methods are interlinked MHSC: research informed by past incident statistics R&D to prevent further losses Multi year research programmes largely stopped Short term, single year activities Impedes development of research capability Restricted to modest R&D gains MHSC developed Centre of Excellence works on using selected services providers as preferred research providers. Operational model not finalised. Annual Reports: excess of R 180 million research funds remain unspent Slide 18 18 Where to Mining / Extraction R&D? Slide 19 19 R&D should be informed by clear strateg y Long term focus, informed by local conditions and global developments Build on capabilities and offerings of all role players, especially the countrys remaining experts Co-ordination, collaboration, complementary effort needed Funding arrangements to be informed by strategy Skills levies (directed to HCD for research and development) NRF funding of high level R&D skills Rents and royalties on minerals, tax incentives A Mining R&D HUB Consolidate research labs and infrastructure House / rebuild national mining capabilities and offerings at CSIR (Carlow Road, Cottesloe, Kloppersbos) Access to MHSC funding to be explored Strategic and Coordinated Slide 20 20 Mining Phakisa An Opportunity to Rebuild R&D 20 Aim of the Phakisa is to enhance activities in strategic areas aligned to National Growth plan Mining identified as a key sector Timing coincides with discussions between institutions and amongst stakeholders about developing a Mining Sector R&D strategy, with specific attention to mining /extraction Inclusive Mining Phakisa process necessary, institutional interest high Slide 21 21 CSIR Initiatives Slide 22 22 The CSIR and its mandate 22 Slide 23 23 The mandate unpacked 23 Slide 24 24 The CSIR response to supporting national priorities The CSIR responds to national priorities in line with its mandate and in support of South Africas National Development Plan To achieve this, the CSIR has: identified research impact areas to focus its research and development implemented flagship programmes that address significant challenges at national scale through multidisciplinary RDI interventions introduced integrated responses to national initiatives and strategic collaboration with government departments, state-owned enterprises and the private sector CSIR response to national priorities Slide 25 25 Future of Mining in CSIR Innovation across the value chain SAMI has plateaued if not on the downward slope on the S curve stepwise or evolution How does SAMI make the change from step wise progression to the revolutionary change required? 25 Slide 26 26 Future of Mining in CSIR Slide 27 27 CSIR through its multi- disciplinary RD&I approach can address significant and multitude of challenges Contribute to maximise efforts together with other institutions CSIR works through Research Impact Areas Aims: wide portfolio management; clear articulation of the CSIR identity; implementation of organisational wide research programmes; strategic stakeholder engagement; improved communication of the CSIR research focus; and development and communication of CSIR capabilities. Future of Mining in CSIR Slide 28 28 Mining Research Impact Area under discussion: Will address Efficient, Safe and Competitive Production: improve efficiencies whilst reducing the exposure to hazards Natural Resource Trade offs: minimise the impact on the environment & surrounding communities, maximise land use opportunities post-mining Value Add post mineral processing: upgrading and value add to RSA minerals via local manufacturing and production Research and Innovation: build an innovation culture Future of Mining in CSIR Slide 29 29 Initiatives to Date 29 Competence and capability mapping across all of the CSIR Business Units of offerings to the mining sector focus is on CSIR integrated capabilities for the Mining sector rather than just dedicated mining capabilities Business plan for Kloppersbos Flammable Gas and Coal dust Explosion Facility CSIR is coordinating a workshop on current SA mining strategies DST engaging CSIR to manage the Rock Innovation Programme CSIR involved with NRF in exploring an international collaborative programme between SA, Finland and Chile. CSIR engagements with China via BGRIMM - exploring collaborative mining research programmme Slide 30 30 CSIR Mining Champions 30 Navin Singh Mining RIA champion Johan le Roux Implementation Unit Host the Mining OHS Laboratories (Kloppersbos, Rope Testing, Air & Dust testing, Human Factors, SCSR etc) May Hermanus CSIR mining champion - Natural Resources and the Environment Slide 31 31 Thank you