Basic Metals and Mining SBU

Transcription

1 Basic Metals and Mining SBU Thabiso Sekano Transnet Supplier Conference 15 th October 2015 DRAFT

2 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

3 DRAFT Our Strengths

4 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 4 4

5 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 5 5

6 DRAFT 2015/16 Strategies

7 Sector Strategy Overview Value Chain Goal* Industry Development Goal* Ensure globally/domestically competitive downstream of: Automotive, machinery &equipment, fabricated metals 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 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 on Musara Development of Large mines Leader:Kevin Hodges Development of strategic mineral and beneficiation Leader:Kevin Hodges 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 of steel and increase competition/ competitiveness of up stream industries and increase exports Lower input costs to up stream industry and improve competitiveness of foundry industry Increase the supply of downstream ferromanganese, 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 7 7

8 Sector Strategy Overview Metals Value Chain Basic metals Value chain Industry evelopment Ensure globally/domestically competitive downstream manufacturing of: Automotive, machinery & equipment, fabricated metals A competitive local steel and metal industry that produces basic metals at prices and quality that stimulate growth of downstream industries Proactive Opportunities 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 opportunities ( ) (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 Size of funding R1.7bn opportunities ( ) (R m) Size of funding opportunities refer to IDC s funding Steel Fabricators, SEIFSA, Labour, Gvt, merchants Reactive areas of funding Metal scrap process and standard long products e.g re-bar, chains, ropes etc EDD, dti, SEIFSA, EAF operators, Foundries Steel Fabricators Smelted products e.g Ferroalloys, Hot-rolled products R3.38bn 8

9 Sector Strategy Overview Metals Value Chain Metal Products Value chain Industry evelopment Ensure globally/domestically competitive downstream manufacturing of: Automotive, machinery & equipment, fabricated metals A competitive local metal products industry that substitute imports and can increase exports to SADC and RoA Proactive Opportunities 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 of growing demand for metal products in SA and RoA especially the Gas industry in East Africa Contribution to industry Goal Size of funding opportunities ( ) (R m) Largest constraints Increase scale and efficiency of SA metal waste and create value to stimulate growth of downstream industries R9.26bn Availability and cost of electricity, EIA approvals, Logistic costs Improve % of SA purchased metal products and to stimulate growth of downstream industries R3.1bn Logistics cost, Energy, lack of skills Stakeholders Steel Fabricators, SEIFSA, Labour, Gvt, merchants Reactive areas of funding Jewellery, cut & bend operations Other fabricated metal products, consumer products, insulated wire and cables, engines and turbines Size of funding R1.9bn opportunities ( ) Size (R m) of funding opportunities refer to IDC s funding R3.4bn 9

10 Sector Strategy Overview Mining Metals Value Chain Mining Value chain Industry evelopment Ensure globally/domestically competitive downstream manufacturing of: Automotive, machinery & equipment, fabricated metals A competitive sustainable modern, innovative and social responsible mining industry. Proactive Opportunities Intended impact on the industry Contribution to industry Goal Size of funding opportunities ( ) (R m) Largest constraints Stakeholders Mining developments that have a life of mine in excess of 20 years (good grade with long life of mine) 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. Spur the development of spin-off sectors R0.5bn billion early stage investment (feasibility studies), R6bn new mine development projects. 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 Department of Mineral Resources, communities, labour, traditional leaders, Department of human settlements, Chamber of mines, DMR, water and environmental affairs Reactive areas of funding Size of funding opportunities ( ) (R m) Expansions, industry consolidation initiatives and repatriation of mining assets R1.2 bn R1.5bn Investments in the continent with direct benefit to SA 10

11 DRAFT Thank You