Identifying barriers to growth in mineral value chains: an analytical framework approach

Van Zyl, Hermanus Jacobus (2017-03)

Thesis (MEng)--Stellenbosch University, 2017.

Thesis

ENGLISH ABSTRACT: South Africa’s comparative advantage in mineral processing brought by its immense wealth in mineral resources, has in recent years failed to fully translate to a national competitive advantage due to particular constraints. This hinders the local industry from capturing a more prominent share of the further-processed mineral market and transitioning the country to a stronger economic position through enabling South Africa to derive greater value from its mineral resources. The mineral processing industry often finds itself going through various changes, with new barriers to growth constantly presenting themselves. Adapting to the ever-changing mineral production environment is a common struggle for many stakeholders involved in this complex field. Furthermore, each production phase has a very specific set of barriers and opportunities which are inherent to their environment and context within the chain. The key barriers to economic growth and business development which restrain participants within the value chain, has not yet been sufficiently identified nor has their extent and impact on the industry properly been established. It is discovered through literature, that no consistent system or guidelines exist which enables researchers or policymakers to systematically identify the barriers that are hindering the various stages of the value chain’s expansion and growth. It is thus unclear how prominent certain problems are in specific mineral industries. A comprehensive framework is thus required that can be applied to any mineral value chain (MVC) to identify the custom set of barriers faced in the different sectors comprising the chain and provide a better understanding of these barriers. The aim of this thesis was thus to develop such a framework which would allow its user to identify and analyse current barriers to growth in each of the stages of MVCs. The identified barriers are sector specific and thus cater directly to the role players actively involved in the chain. This allows for specialized barrier analysis for each firm in an MVC that is distinct and relates specifically to them. Three primary framework design requirements were identified to achieve this aim, namely: identify and describe the MVC environment, identify barriers in the MVC, and prioritize the barriers. Six different approaches for describing and investigating value chains were reviewed in order to identify the current research gap and limitations of similar frameworks. These issues were addressed through the inclusion of 20 tools to fulfil each of the framework requirements. The tools were partitioned into six framework phases, with each phase focusing on a specific element of analysis. In order to convey the utility of the framework, it was applied to a case study, namely the South African manganese industry. Four different production sectors were identified in the chain within the scope of the study, namely the mining, alloy manufacturing, EMD and EMM production sectors. Through an iterative process of interviews and surveys, 31 barriers to growth were identified across these four sectors, with Oversaturated market being the most significant impediment, followed closely by the rising costs of electricity, labour and transport. Through expert analysis based on the results generated from the case study, it was concluded that the framework successfully facilitates the identification of barriers within a MVC. The validators concurred that the proposed framework addresses a specific need within the industry and is a useful tool for its stakeholders. The holistic and systematic approach to a multi-faceted and complex subject was identified as the framework’s primary strength. All the shortcomings that were identified, were reviewed and addressed by reworking the framework where applicable.

AFRIKAANSE OPSOMMING: Suid-Afrika se vergelykende voordeel in mineraalverwerking wat aangebring is deur sy rykdom aan mineraalhulpbronne, het in die afgelope jare versuim om in ‘n nasionale mededingende voordeel omskep te word as gevolg van bepaalde beperkings. Dit verhinder plaaslike bedrywighede om ‘n meer prominente skyf van die verwerkte minerale mark op te neem en die land in ‘n sterker ekonomiese posisie te plaas deur Suid-Afrika in staat te stel om meer waarde van sy minerale te verkry. Die mineraalverwerkingsbedryf ondervind dikwels verskeie veranderinge en nuwe hindernisse tot groei wat voortdurend voorspring. Die aanpassing by die voortdurende veranderende mineraalproduksie-omgewing is ‘n algemene stryd vir baie belanghebbendes betrokke by hierdie komplekse veld. Verder, het elke produksie fase van die ketting ‘n baie spesifieke stel struikelblokke en geleenthede wat inherent is tot hul omgewing en konteks binne-in die ketting. Die kern hindernisse wat ekonomiese groei en sake-ontwikkeling binne die waardeketting beperk, is nog nie voldoende geïdentifiseer nóg is hul omvang en impak op die bedryf behoorlik bepaal nie. Geen ooreenstemmende stelsel of riglyne is in literatuur ontdek wat navorsers of beleidmakers bemagtig om stelselmatig die struikelblokke wat groei en ontwikkeling binne die verskeie sektore van die waardeketting teenwerk, te identifiseer nie. Dit is dus onduidelik hoe prominent sekere probleme in spesifieke mineraal nywerhede voorkom. ‘n Omvattende raamwerk word dus vereis wat op enige mineraalwaardeketting (MWK) toegepas kan word om sodoende die struikelblokke in die verskeie sektore wat die ketting opmaak, te identifiseer en ‘n beter begrip van hierdie hindernisse te verskaf. Die doel van hierdie tesis was dus om so raamwerk te ontwerp, wat sou toelaat dat gebruikers huidige struikelblokke tot ontwikkeling in elkeen van die MWK fases kan identifiseer en ontleed. Die geïdentifiseerde struikelblokke is sektor-spesifiek en maak dus direk voorsiening vir die rolspelers wat aktief betrokke is in die ketting. Dit laat dus ‘n gespesialiseerde versperrings-analises vir elke firma in die MWK toe, wat spesifiek aan hulle verwant is. Drie primêre raamwerk-ontwerp vereistes is geïdentifiseer om hierdie doel te bereik, naamlik: identifiseer en beskryf die MWK-omgewing, identifiseer die struikelblokke in die MWK en prioritiseer die struikelblokke. Ses verskillende benaderings vir die beskrywing en bestudering van waardekettings is ondersoek, ten einde die huidige navorsingsgaping en beperkings van soortgelyke raamwerke te identifiseer. Hierdie kwessies is aangespreek deur die insluiting van 20 hulpmiddels wat aan elkeen van die raamwerk se vereistes voldoen. Hierdie hulpmiddels is in ses raamwerkfases verdeel, met elke fase wat op ‘n spesifieke ontledingselement fokus. Met die oog om die nut van die raamwerk oor te dra, is dit op ‘n gevallestudie, die Suid-Afrikaanse mangaanbedryf, toegepas. Vier verskillende produksie sektore is in die ketting geïdentifiseer wat binne die bestek van die studie val, naamlik die mynbou, allooivervaardiging, EMD- en EMM-produksie sektore. Na ‘n iteratiewe proses van onderhoude voer en opnames maak, is 31 struikelblokke tot groei oor die vier sektore geïdentifiseer, met die Oorversadigde mark wat as die beduidendste struikelblok bestempel is. Dit is gevolg deur die stygende koste van elektrisiteit, arbeid en vervoer. Die ontleding van resultate wat uit die gevallestudie verkry is deur kundiges, het tot die gevolgtrekking gelei dat die raamwerk suksesvol die indentifisering van struikelblokke in ‘n MWK kan fasiliteer. Diegene wat by die validasieproses betrokke was, het saamgestem dat die voorgestelde raamwerk ‘n spesifieke behoefte in die bedryf aanspreek en as ‘n nuttige hulpmiddel beskou kan word. Die holistiese en sistematiese benadering tot ‘n veel-vlakkige en ingewikkelde onderwerp, is as een van die raamwerk se hoof kenmerke aangewys. Al die tekortkominge wat tydens hierdie proses uitgewys is, is aangespreek en die raamwerk is toepaslik hersien.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/100813
This item appears in the following collections: