Basic Metals and Mining SBU Transnet Supplier Conference 15 th - - PowerPoint PPT Presentation

DRAFT

Basic Metals and Mining SBU

Transnet Supplier Conference 15th October 2015 Thabiso Sekano

DRAFT

The Goal of IDC’s Metals value chain is to assist in developing a competitive and diversified local metal products industry that effectively utilizes capacity to produce a significant portion of metal products consumed in SA, in addition to developing strong export markets The Mining and Basic Metals unit is one of three business units that make up the Basic Metals value channel. The unit is headed by Mazwi Tunyazwi and comprises 14 dealmakers made up of Engineers, Metallurgists, Chartered Accountants, and Geologists

DRAFT

Our Strengths

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Business Unit Strengths

• Balanced mix of experience in deal making

and project management

• In-house skills in project initiation and

development

• Ability to partner and co-invest with both

local and international investors

• Ability to co-fund with other lenders (both

local and international)

• Wealth of experience and institutional

knowledge of the RSA mining and metals industry

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Our Goals

• Identify and finance areas of process improvements

and projects within production facilities necessary to improve yield and align efficiency with global standards

• Finance related foundry construction / capacity

expansion

• Co-finance studies with private sector that identify

and plan exploitation of cheaper inputs,

• Invest to build new / upgrade facilities aimed at

localizing production of high demand products

• Finance technological improvements within sector

aimed at increasing production of higher grade steel

DRAFT

2015/16 Strategies

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Sector Strategy Overview

Opportunity Increase Production of non ferrous metals Leader: Nina Yose Increase local production of Iron, Steel and related inputs Leader:Christian Carstens Increase steel scrap recycling capacity and milling capacity Leader:Inderasen Naidoo Increase Local production of ferroalloys Leader:Washingt

• n Musara

Development of Large mines Leader:Kevin Hodges Development of strategic mineral and beneficiation Leader:Kevin Hodges Opportunity sub-sector

• Aluminium

Rod production

• Copper Rod

Production

• Automotive

body panel aluminium production

• Masorini Iron

and Steel production

• Coking coal

mining in RSA/SADC

• Production of

thin gauge stainless steel

• Scrap recycling

Mini Mills

• Foundry

Modernisation

• Improve Scaw’s

competitivenes s

• Manganese

Mining and beneficiation

• Ferrochrome

mining and beneficiation

• Ferro-nickel

mining and beneficiation

• Precious Metals
• Natural Gas

mining

• Bulk

Commodities

• New Industry’s

minerals

• Production of

Phosphate and Potash

• Coal Mining
• Industrial

minerals

• Uranium

Intended impact on the industry Security of raw material supply/lower input costs to the up stream industries Lower input costs

• f steel and

increase competition/ competitiveness

• f up stream

industries and increase exports Lower input costs to up stream industry and improve competitiveness of foundry industry Increase the supply of downstream ferro- manganese, ferro-chrome, ferro-nickel ore and exports Increase exports, create sustainable employment and reduce RSA deficit Increase supply to the upstream industry, energy security and import replacement and exports

Value Chain Goal*

Ensure globally/domestically competitive downstream of: Automotive, machinery &equipment, fabricated metals

Industry Development Goal* A globally competitive and diversified local basic metal and mineral resource industry that effectively utilizes capacity to produce a significant portion of metals products and minerals consumed in RSA and RoA , in addition to developing increased export of value added minerals

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Sector Strategy Overview – Metals Value Chain Basic metals

Opportunity Steel and related inputs/Fabricated products – flat and long steel Scrap and scrap replacements, e.g. pig iron, billets Foundries (brake drums, pumps) and mini mills Intended impact on the industry Production of basic metals at prices and quality at competitive prices Reduction of major input cost EAF operators, and mini mills Improving the quality and competiveness of suppliers to downstream industries Contribution to industry Goal Reduce prices of relevant products to downstream industries Reduce prices of relevant products to downstream industries Reduce prices of relevant products to downstream industries Size of funding

• pportunities (2016-2026)

(R’m) Steel related projects: R7.86bn Scrap replacement projects: R840m Mini-mills and foundries modernisation: R2.52bn Largest constraints Availability and cost of electricity, EIA approvals, Logistic costs Availability and cost of electricity, scrap availability Availability and cost of electricity, scrap availability Stakeholders Steel Fabricators, SEIFSA, Labour, Gvt, merchants EDD, dti, SEIFSA, EAF

• perators, Foundries

Steel Fabricators

Ensure globally/domestically competitive downstream manufacturing of: Automotive, machinery & equipment, fabricated metals Value chain goal Industry development goal A competitive local steel and metal industry that produces basic metals at prices and quality that stimulate growth of downstream industries Proactive Opportunities Opportunity Metal scrap process and standard long products e.g re-bar, chains, ropes etc Smelted products e.g Ferroalloys, Hot-rolled products Size of funding

• pportunities

(2016-2026) (R’m) R1.7bn R3.38bn Reactive areas of funding

Size of funding opportunities refer to IDC’s funding

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Sector Strategy Overview – Metals Value Chain Metal Products

Opportunity Steel and Scrap Beneficiation Structural and Packaging products(e.g tankers, pipes) Intended impact on the industry To develop niche capabilities to take advantage of growing demand for metal products in SA and RoA To develop niche capabilities to take advantage

• f growing demand for metal products in SA

and RoA especially the Gas industry in East Africa Contribution to industry Goal Increase scale and efficiency of SA metal waste and create value to stimulate growth of downstream industries Improve % of SA purchased metal products and to stimulate growth of downstream industries Size of funding

• pportunities (2016-2026)

(R’m) R9.26bn R3.1bn Largest constraints Availability and cost of electricity, EIA approvals, Logistic costs Logistics cost, Energy, lack of skills Stakeholders Steel Fabricators, SEIFSA, Labour, Gvt, merchants

Ensure globally/domestically competitive downstream manufacturing of: Automotive, machinery & equipment, fabricated metals Value chain goal Industry development goal A competitive local metal products industry that substitute imports and can increase exports to SADC and RoA Proactive Opportunities Opportunity Jewellery, cut & bend operations Other fabricated metal products, consumer products, insulated wire and cables, engines and turbines Size of funding

• pportunities

(2016-2026) (R’m) R1.9bn R3.4bn Reactive areas of funding

Size of funding opportunities refer to IDC’s funding

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Sector Strategy Overview – Mining Metals Value Chain Mining

Opportunity Mining developments that have a life of mine in excess of 20 years (good grade with long life of mine) Intended impact on the industry Ensures sustainable development of the area around the mine supports primarily the ongoing development of the upstream manufacture of mining equipment and secondly the provision of services to the mine. Contribution to industry Goal Spur the development of spin-off sectors Size of funding opportunities (2016-2026) (R’m) R0.5bn billion early stage investment (feasibility studies), R6bn new mine development projects. Largest constraints Mindset of mining shareholders and management, lack of coordinated planning, EIA approval, MRDA administration, water licences, Cost and availability of electricity, legislation to be in line with new mining model Stakeholders Department of Mineral Resources, communities, labour, traditional leaders, Department of human settlements, Chamber of mines, DMR, water and environmental affairs

Ensure globally/domestically competitive downstream manufacturing of: Automotive, machinery & equipment, fabricated metals Value chain goal Industry development goal A competitive sustainable modern, innovative and social responsible mining industry. Proactive Opportunities Opportunity Expansions, industry consolidation initiatives and repatriation of mining assets Investments in the continent with direct benefit to SA Size of funding

• pportunities

(2016-2026) (R’m) R1.2 bn R1.5bn Reactive areas of funding

DRAFT

Thank You