Investing in the economy

Summary of operational performance

Mining and Minerals Beneficiation SBU
Performance   2010   2011   2012   2013  
Total value of financing approved (Rm)  3 143   737   3 551   5 342  
Total number of jobs expected to be created or saved   8 744   3 613   12 110   166  
Impairments as a % of outstanding book (at cost excluding undrawn commitments)  13%   14%   16%   11%  
Focus areas   
Steel and steel-related inputs  
Early stage project development of mining linked to beneficiation  
Development of mineral resources in the rest of Africa  
‘New Age’ minerals  


2009   2010   2011   2012   2013  
  • Assisted a number of BEE companies in the iron ore and platinum industries with operations in Mpumalanga and the Northern Cape
  • Joint arranger for an ECIC-backed facility for a copper cobalt Project in the Democratic Republic of the Congo
  • Significant funding support to companies hard hit by the financial crisis helped sustain the operations with a significant number of jobs saved
  • Approval of funding to Kalagadi Manganese for construction of a mine and sinter in the Northern Cape and smelter facility in the Eastern Cape
  • Significant funding approvals to women-owned or controlled companies
  • Pre-feasibility for integrated steel plant shows positive results justifying further study work in 2012
  • Good progress made in the implementation of Kalagadi Manganese with the start of construction of the mine and sinter plant and approval of infrastructure work to be done
  • Good progress made with development and implementation of projects
  • Significant improvement made in reducing turnaround time for approvals
  • Approvals to Exxaro, Kalagadi Manganese and Platmin Limited, all of which have beneficiation as central to their business plans
  • Acquisition of Scaw, a significant player in the regional steel industry, approved and transaction concluded
  • Acquisition of a stake in Palabora Mining Company which is central to IDC’s steel initiatives. Approval is subject to regulatory approvals in China and South Africa
  • Ramping up of production at Platmin Limited has progressed well

Recent performance  

Continued depressed global markets, particularly in advanced economies and moderate industrial growth in China have continued to put pressure on the mining sector, resulting in weaker commodity prices and demand. This has led to a number of projects being postponed or cancelled due to concerns around sustainability. The IDC has thus seen decreased activity, resulting in a low level of jobs to be created by projects approved in 2013 and an increase in impairments as a result of poor performance of underlying investments. Progress was made with regard to development of initiatives and implementation of projects in the steel, manganese, iron ore and platinum sectors.

Potential partners have expressed an interest in the Masorini Iron and Steel Project subject to completing a due diligence on the pre-feasibility study work done by IDC. The acquisition of Scaw was concluded and the IDC is part of the successful consortium that is acquiring Palabora Mining Company. Construction of a directly reduced iron (DRI) plant in Phalaborwa is progressing well and so is the construction of a steel mini mill in Germiston. Platmin Limited is ramping up production and the bankable feasibility study on Lesego Platinum has been completed. The Kalagadi Manganese mine and sinter plant has had some delays, however, the sinter has been cold commissioned and work on the underground mine is ongoing.


  • Poor pipeline of new applications as a result of cut-back in capital expenditure by potential applicants due to the depressed global economy;
  • Increasing input costs such as electricity and labour putting business performance at risk as this threatens the survival of low-margin operations, particularly gold and platinum operations;
  • Difficulty in attracting overseas investors due to hesitancy in investing in South Africa as a result of labour unrest and a perceived uncertain regulatory framework;
  • Lack of funding of early stage exploration projects due to high-risk nature of such projects resulting in a poor pipeline of new projects;
  • Building strong communities around the mining operations supported by IDC; and
  • High energy costs, technology risk, high capital cost and decreased funding for research and development hamper beneficiation.

Strategy and prospects

The Mining and Minerals Beneficiation SBU focuses on primary mining, primary and secondary beneficiation and mining services. Our activities cover the mining industry in general in South Africa and the rest of Africa, with a special focus on sub-sectors such as energy minerals (coal, uranium), steel and steel-related inputs (iron ore, coking coal, manganese, chrome), precious metals (PGM, gold, diamonds) new technology related minerals such as lithium, Rare Earth Elements and others. In each of these sectors, beneficiation will be a significant part of our activities to add value to the primary ore. The focus is thus on minerals that can stimulate and support downstream manufacturing and beneficiation in order to industrialise economies in the region. The unit aims to get involved in early stage project development and providing appropriate funding mechanisms for the stage of the project in order to give support through to implementation.

The lack of competition in the local steel industry and the opportunity to support government’s infrastructure programme, coupled with growing urbanisation in the region and expectations of growth in the per capita consumption of steel point to a market opportunity to increase the steel-making capacity in the country. Concerted effort will be put into making progress in the various steel initiatives. Support of junior mining companies in the platinum sector will continue to be an important part of our activities to support downstream beneficiation. Consolidation opportunities in the platinum sector will be pursued to build up scale, preferably using existing IDC investments as a platform.

Coega Dairy Holdings

The IDC has identified increased competition in the dairy value chain and import substitution in the cheese industry as key sector development goals. We also singled out the need for increased farmer (and specifically B-BBEE) participation in dairy value-adding initiatives.

Windtown Lagoon Resort 

The newly built Windtown Lagoon Resort and Spa reflects the IDC’s focus to funding community-based projects that have potential to create employment opportunities in far-flung regions.

R13.1 billion
R16.0 billion
18 922
3 950
© The IDC 2013. All rights not expressly allowed are reserved. P.O. Box 784055, Sandton, 2146, South Africa