Mining sector requires support from government

The adoption of the Mining Charter III has led to some confusion in the mining sector, specifically on the local-content verification process, which means further insight and understanding of Charter requisites are required throughout the mining value chain, says industry body South African Valve & Actuator Manufacturers Association (Savama).

“There is a need to educate our engineers and mining value chain on specific Charter requirements. We advise mining groups to engage with the Department of Trade, Industry and Competition (DTIC) and the South African Bureau of Standards to obtain a better understanding.”

Further, support from government is required to fight against “substandard, cheap imported products” that have adversely affected the value chain, from struggling foundries to the non-existent servicing of imported products, says Savama.

The valves industry and association members are playing an “important role” in educating end-users on the importance of local content and the social capital inherent in supporting locally manufactured products, which Savama notes has been well received.

Restrictions and Recovery

Covid-19 has had a detrimental impact on the mining industry and the restrictions imposed to safeguard health and safety, particularly the travel restrictions, have hindered suppliers in providing turnkey solutions and maintaining high service levels.

Despite the challenges, the industry has noticed increased mining activity in the past six months, owing to recovering commodity prices.

The precious metals sector has reported some substantial returns; this needs to evolve into freeing up spend to replace, upgrade and expand operations on various mines, Savama states.

The industry will likely focus on new plants and installations, and support from government will also “be greatly appreciated”, says the organisation.

This means that the government through the DTIC will facilitate information sessions with the mining sector to ensure that the local content requirement of 60% is adhered to and the items are sourced from local manufacturers. 

“Local valve manufacturing companies have faced tough challenges over the past three years, owing to very few infrastructure projects and the struggling foundry industry, which has had a detrimental effect on the entire supply chain.

“The valve industry in South Africa has seen companies implement extreme measures to survive, which, unfortunately, could not stave off closure for some businesses,” says Savama.

Fortunately, the valve industry is focusing on innovation – on a product and an infrastructure basis – and while still affected by the lockdown, the industry recognises the potential for the increased implementation of pipelines to transport materials, as opposed to road haulage, for example. The industry needs to focus on innovation, the organisation notes.

Savama highlights that exports play an “enormous role” in the valve industry. Restrictions on travel, coupled with different countries implementing different levels of lockdown at any time, have resulted in the industry’s not reaping the full benefits that exports normally add to the overall success of valve companies.

“South Africa has reputable valve businesses that have international customers, and the global pandemic has negatively impacted on the service provided to the world.

“Freight delivery days have been increased consistently throughout the pandemic and affect the global supply out of South Africa.”

Savama says government’s reassurance and commitment to assist and guide all sectors of manufacturing are key in ensuring that current manufacturers are sustainable enough to help with the development of the local economy in future.

“The South African valve industry has showcased its abilities locally, in Africa and throughout the world; this is a success story that should be continued, but government’s support is required,” it concludes.