8
MODERN QUARRYING
October - November 2013
AROUND THE
INDUSTRY
The South African foundry industry is at a
crossroads according to the Scaw Metals
Group. Not only is the industry suffering
from the effects of a depressed market,
but uncompetitive local rawmaterial costs
are threatening the future of the industry.
According to the Industrial Structures
and Skills in the Metals Beneficiation
Sector of South Africa report, the number
of foundries has dwindled over the past
couple of years. In the 1980s, foundry
numbers dropped to around 450. In 2003
that number plummeted to just over 200.
Between 2007 and 2011, the number fell
by 13% and the employment figure in the
industry fell by 30% over the same period.
“The local industry is in real trouble.
Due to the continuing poor local demand
experienced over the last couple of years,
the remaining players in the industry have
BME has been building its business in
Zambia since 1999, and the results are
now showing clearly. The country has
become the company’s second-most
important market behind its home turf in
South Africa, where it is a major player in
the opencast segment.
“Our starting point in Zambia was
a contract we won at Konkola Copper
Mines, both for underground operations
and the Nchanga open pit,” says Ralf
Hennecke, general manager, international
marketing. “Since then, we have created a
local footprint for our operations, which
we continue to expand, and are making
an increasing contribution to Zambia’s
mining sector, economy, skills and com-
munities. We now have 37 customers in
Zambia consisting of large copper mines,
and smaller operations in quarrying,
cement, emeralds, coal and nickel.
“In line with our growing Zambian
footprint, we have an administration head
office in Chingola, which we are currently
expanding, and depots in Lusaka, Kafue
and Ndola. It has been vital to attract and
build the skills to run these offices well, not
just with good financial and administra-
tion people, but with experts in fields like
human resources, safety and health.”
The company is engaged with the
University of the Copperbelt at Kitwe as
part of its corporate social responsibility
drive to improve skills and employability
of local learners. BME is planning a train-
ing centre that will focus on key technical
and other skills vital to the mining sector
and blasting functions in particular.
The company employs over 130
people in Zambia, with a few expatriates
among these.
not invested in the required capital equip-
ment and new technologies,” says Ufikile
Khumalo, executive chairman of the Scaw
Metals Group. Not only is the increas-
ing input cost of raw materials like scrap
metal to blame for the industry’s current
dilemma, but the annual hike in electricity
costs, poor and inconsistent local demand
for foundry products and rising imports
are all contributing factors.
The lack of skilled labour has also
been labelled as being a concerning issue
for the local industry. “New training for
the employees of foundries has not been
prioritised by local companies, which has
resulted in the foundries generally having
an ageing workforce.”
He believes that the only way for the
local industry to get back on its feet is by
the help of the South African government.
“The Department of Trade and Industry
and the Depar tment of Economic
Development must implement the
required measures, in a coordinated effort
to support the foundries. Such measures
can and should be both from the supply
and demand side. The South African gov-
ernment has already started with some
interventions in this regard, namely the
policy directive related to limiting the
export of ferrous and non-ferrous scrap.
“This will assist local foundries to have
access to scrap at better prices. The jury
is still out on how the metal recycling
industry will respond in terms of logis-
tical issues as the matter has not been
welcomed by the local recycling industry.
The primary and secondary steel produc-
ers, however, have all welcomed the pro-
posed intervention,” says Khumalo.
The local industry must make use of
state procurement and funding by key
parastatals, which will help support the
existing foundry capacity and to invest in
new technologies by channelling a large
proportion of orders to local existing
industries.
The Scaw Metals Group has put plans
in place and acquired enough funds to
expand its existing capacity and improve
on its efficiencies. “Scaw also has access
to the latest technologies through long-
standing partnerships with reputable
international companies that supply the
international foundry market. According
to a 2013 report by the South African
Institute of Foundrymen, local foundries
are the most important role players as
far as GDP is concerned. Foundries con-
tribute R9 048-million/year to the South
African GDP. Its eventual closure through
policy neglect will severely impact the
South African economy.
The study confirms clearly that an
intervention by government to optimise
the foundry and scrap metal industry in
South Africa is needed and will be far
more beneficial than a policy of ‘doing
nothing’, allowing the current status quo
to persist. Despite the need to sustain the
foundry industry and the related down-
stream industries involved, such as the
expanding automotive industry which is
a key user of metal products, among oth-
ers, the output and employment of the
foundry Industry within the metal indus-
try has steadily declined over the past few
decades.
Local foundry industry in dire straits
Scrap metal is the key raw material ingredient in the foundry industry.
Zambia booms for blasting specialist
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