Beneficiation is not the easy solution for Africa, says economist David Kaplan
Where the mining sector does offer opportunities, however, is in the products and services it needs
Busan — Much has been said about beneficiation in SA, but apparently being a producer of raw materials does not necessarily equate to having an advantage in moving up the value chain, according to University of Cape Town economics professor David Kaplan. "In Africa it’s always said that we produce the iron and steel — why don’t we produce the pots and pans? We produce the gold, why do we not produce the jewellery?" Kaplan said on Thursday." The fact that you produce raw materials very often doesn’t give you any real advantage to any further activity downstream. "I think this area has been exaggerated as an area for Africa’s production." The possibilities for forward integration were hardly low-hanging fruit, he said. However, where a country produces scarce resources with high levels of demand, there is room for bargaining — as Botswana did with De Beers in the sale, sorting, and cutting and polishing of diamonds. Kaplan was speaking in Busan, Korea’s second city, where the annual ...
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