Department of Mineral and Petroleum Resources* beneficiation economics director Kagiso Menoe has said that, despite the challenges brought about by the global green transition, government's outlook on the South African ferroalloys industry remains upbeat.

Speaking at the Critical Materials Conference: Ferroalloys 2024, in Johannesburg, on September 11, he discussed the impact of global greenhouse gas (GHG) mitigation policies on the local ferroalloys industry and observed trends resulting from these policies.

He bemoaned that developed countries were using the issue of GHG emissions to support their own industrialisation policies, introducing measures such as carbon border adjustment mechanisms.

These measures, he said, would negatively impact countries such as South Africa, which depended heavily on fossil fuel electricity generation.

“We believe they are kicking away the green ladder that we had hoped as developing countries would drive industrialisation in the country,” Menoe said.

He also expressed concern over the concentration of major developers and producers of low-carbon energy products in economic powerhouses such as the US, Germany, Japan and China.

He pointed out that these nations were dominating the sector and driving their low-carbon growth trajectories, leaving developing countries at a disadvantage.

Menoe highlighted that the South African government had several responses to these challenges, such as a focus on research and development (R&D) and finance.

He explained that the government was considering possible interventions within the ferroalloys industry to adopt ‘green’ energy sources to power operations.

He said that this effort, however, was not about powering furnaces directly, but rather about improving processes, enhancing energy efficiency and amplifying the green nature of energy use in other areas of production.

“We are also glad that there is uptake by the industry in terms of new technologies,” he said, noting that these technologies were being explored with the help of the Industrial Development Cooperation (IDC), which was promoting the adoption of greener energies through financing.

Menoe highlighted that one way the IDC was promoting greener energy adoption was by encouraging the use of green hydrogen in key sectors such as ferroalloys, steel and cement making.

Simultaneously, the IDC is considering funding transitional industrial fuels that are less carbon-intensive than coal.

Nevertheless, Menoe emphasised that these technologies would still need to be used in conjunction with coal-fired power stations, pointing out that South Africa’s competitive and comparative advantage when it came to coal should not be dismissed but rather leveraged.

Menoe insisted, however, that the green transition does not need to mean deindustrialisation in South Africa or shutting down the local ferroalloys industry.

“It just means we need to find ways to industrialise in a more sustainable manner,” he said.

* Following the May national elections, the South African government has decided to separate its Department of Mineral Resources and Energy into two separate departments – the Department of Mineral and Petroleum Resources and the Department of Electricity and Energy.