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About 25 leading Indian companies in the steel and power sector are seeking mining rights for iron ore and coal in South Africa, according to South African Consulate officials.
Ms Allison Christian, Deputy Director, Business Facilitation Trade and Investments, said the companies had approached the consulate to assist them in securing local mining opportunities. Declining to disclose names before deals were inked, she said they were top corporate houses in the power and steel segment.
Mining and FDI
One hundred per cent foreign direct investment is allowed in almost all sectors in South Africa, except in mining where it is mandatory to have a local partner who will be the licence-holder.
More important, the country is looking for companies skilled in beneficiation of diamonds and gold to set up shop there. Most of the diamond mining rights are with DTC (Diamond Trading Company), which takes the roughs mined to Antwerp and sells it to its licence-holders – those registered with the company.
The South African Government assures companies that establish beneficiation facilities there of a steady supply of roughs. The Government gets 10 per cent of the diamonds mined in the country and the State Diamond Trading Company tenders them out.
It is from this repository that the Government will feed overseas beneficiation companies that set up facilities there.
Un-mined reserve
South Africa produces 14 per cent of the world's gold and has 41 per cent of known reserves. It is estimated that 21,000 tonnes or about one-fifth of the world's gold is in the country, and, yet to be mined.
South Africa exports about 20 per cent or $35 million worth of finished jewellery. The export basket includes precious metals, rough diamonds, besides silver and platinum.
Basket of minerals
Officials said that in 2007, about 53 different minerals were produced from 1,414 mines and quarries. Of this, 50 mines produced gold, 31 platinum group metals, 96 coal and 344 diamonds as primary commodities.
The country's Department of Minerals and Energy data indicate that South Africa accounts for 40 per cent of the global production of ferrochromium, platinum group metals and vanadium. Besides it is also a leading producer of chrome ore and alumino-silicates.
South Africa's exports to India for September 2011 totalled ZAR 3,010 million (Rs 191 crore approx) of which coal accounted for ZAR 1,473 million, diamonds ZAR 20 million and silver (including silver or platinum plated with gold) ZAR 72 million.
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