Mintek: briefing

Meeting report

ARTS, CULTURE, SCIENCE AND TECHNOLOGY PORTFOLIO COMMITTEE
10 June 2003
MINTEK: BRIEFING

MINTEK presentation by Dr Paul Jourdan
Website address: www.mintek.co.za
Arts, Culture, Science and Technology Committee Programme

SUMMARY
Mintek highlighted important developments within the organisation with particular respect to minerals, technology , outreach, and resource development, meeting transformation targets and the black economic empowerment (BEE) imperatives. It attributed its shortfall to the foreign exchange losses experienced and market restructuring. Mintek, as a world leader in its field of expertise, acknowledged the need for investment in the development of young scientists if South Africa was to remain at the cutting edge of metallurgical research.

MINUTES
Dr Jourdan briefly related the rich history of mining and ancient inscriptions in Southern Africa. He briefed the committee on activities and recent achievements in Mintek and its subsidiaries Tollsort, Musuku, Mogale and Atoll during 2002/2003 against the background of a challenging year financially. the shortfall was not only as a result of the weakened Rand at a time when half of their private jobs were foreign, thus costing them a foreign exchange loss of R2 million. Transformation costs of about R1 million were incurred when having to split departments; and the investment of R5 million in resources to start up the new venture when Mintek was launched. Dr Jourdan explained that the shortfall was as a result of market restructure in a bid to be competitive. With any investment there was a long lead time before revenue would be seen.

Of particular note was that state funding, which had dropped from 100% to 40%, was totally ring fenced. It was internally allocated to projects on a competitive basis. An amount of 75% was spent on research, 15% on human resource development, and 10% on socio development programmes. Of concern was that Mintek had lost scientists to industry mainly because they paid 30% less. The Mintek salary gap had been narrowed to 10%. Mr Jourdan pointed out that although turnover was bad in the sense that it destroyed your capacity, it in turn lowered your cost; hence a healthy balance was needed.

South Africa was described as a world leader in high technology that needed to build up its export industry and move from being a country that exported raw materials to one that exported manufactured goods. Mintek was said to be involved in the technology for poverty reduction on the minerals side. Lateral migration of technology was leading Mintek towards all sorts of possibilities such as scan equipment used on diamond mine workers could be used to fully x-ray car accident victims for broken bones.

Mintek highlighted several achievements. Of note was the school in Zola that they had adopted. A technological break through highlighted was the respirator mask with special gold filters that converted harmful carbon monoxide into harmless carbon dioxide. Another notable highlight was that they had been mandated to take over Alexco, which was making considerable losses. Within their mandate they managed to turn-around period Alexco into profitable operation. Mintek decided to shed Alexcor into being stand-alone entity because its activities were not an area of Mintek's expertise.

Discussion
Ms H Mpaka (ANC) asked in line with transformation, how many females and persons with disabilities were employed by Mintek.

Dr Jourdan said females made up 20% of their staff. He explained that attracting women to what was essentially a male environment continued to present challenges since most women with the required levels of expertise in maths and science tended to prefer the life sciences and information technology to minerals and metallurgical research and development. The number of people with disabilities employed was lower than 2% because the nature of the work was dangerous, as they worked with furnace; sight and hearing were critical. Their premises were disability friendly after having embarked on massive retro fitting.

The Chairperson, Ms Njobe (ANC) requested that a breakdown of their human resources, with the composition of gender and disabilities included, be sent to the Portfolio Committee because members were interested in seeing if transformation was realistic.

Prof I Mohamed (ANC) commented that on a visit to London, he had been very impressed when he saw Commercial De Beers minerals being sorted out by colour and weight by camera. He had been told that camera sorting was not done in this manner in Kimberly. He also asked Mr Jourdan to comment on the state fund being 40% and in view of government putting less and less into research and development funding.

On funding Dr Jourdan explained that with money going into new focus areas was based on funding in the projection was flat, hence Mintek had to be proactive and competitive.

Ms Mbuyazi (IFP) asked whether the poverty alleviation projects and research development were only applicable to mining industries.

Dr Jourdan explained that their poverty alleviation projects involved small-scale low value minerals, which necessitated that the projects be concentrated on the communities where the minerals were found. He referred members to the small Mintek booklet entitled 'Mintek in brief'.

Mr S Opperman (DP) asked if Mintek would assist with the new Telescope (SKA)

Dr Jourdan said that there was not a lot of synergy between SKA and mining. The only connection was that they were assisting in looking for a minerally silent area.

Ms Njobe requested details of how they could access the information Mr Jourdan had related on the history of mining.

Mr Jourdan assured the members that he would forward a list of books available from Mintek library. They had been working with the Freedom Trust to put together a coffee table book on ancient metal; and that was a useful book containing the history of mining was the South African Mining and Heritage book that was currently being revised.

Ms T Tshivhase (ANC) was concerned that Limpopo was a very rich in minerals, and a lot of these mineral resources were still untapped in the rural areas, thus not creating jobs for people.

Dr Jourdan acknowledged Limpopo's wealth in minerals, particularly in the southern end of Limpopo; he said the province was very rich and booming in minerals. These included gold belts and iron deposits; the small Mintek booklet included some of the areas and communities they assisted.


Mr N Ngcobo (ANC) cautioned that in joint ventures, many companies had developed techniques about addressing what our leadership wanted to hear; and if one did not have insight it was difficult to pick out the odds. He added that one had to find a way to ensure that these ventures would be beneficiary to South Africa first.

Dr Jourdan said that in line with Nepad initiatives joint ventures were entered into with developing countries, but the companies did not always have the same objective as the developing State. He added that minerals are part of national patrimony, and that Mintek monitored if transformation was ongoing with its partnerships. Dr Jourdan suggested that National Departments implement a carrot and stick approach to maximise resources, saying that it was up to the state to help turn capital into good capital. He further added that Globalisation had put Mintek into a defensive mode.

Ms H Mpaka (ANC) was concerned as to whether local communities were benefiting as being part of decision making or benefits were limited to job creation. In line with national empowerment- with black economic empowerment (BEE) groups was Mintek looking for already established groups?

Dr Jourdan assured members that Mintek was very strong on having new entrants as empowerment partners, however they tried to create a health balance between balance sheet expertise and skilled metaligists amongst the entrants. He explained that they went through a rigorous process to try and find the best people for the project and for the country. He said they brought in opportunity versus entrepreneurship. Minesco had been brought in as a Facilitating State Vehicle to assist BEE groups to build their own dignity from the ground. An example cited was that of the Lebowa Trust joint venture where the group had the mineral rights to build their own legacy.

In closing the Chairperson said that the Committee would like to stress that technology ought to remain in South Africa, the country produced manufactured goods for exporting, as against raw materials.

The meeting was adjourned.