South Africa's mining sector could be forced to take part in beneficiation activities, the Department of Mineral Resources (DMR) has indicated.

Mining licences could be granted with conditions attached to ensure a supply of raw materials for local industries to further refine minerals.

Mineral resources chief director Siyabonga Ndabezitha said the previous way of doing things was no longer an option, Business Live reports.

"We have realised that maybe we need to do things differently, and make sure that in all the new licences that we'll be issuing, there would be certain conditions, which would make it possible for new entrants to have access to the required raw materials," he told MPs.

The government's beneficiation strategy, approved in the summer, is due to be finalised later this year, and will cover five "value chains", which include two industries directly linked with platinum group metal mining: catalytic convertor production and jewellery.

Mr Ndabezitha further indicated that the Mineral and Petroleum Resources Development Act (MPRDA) would be amended to allow new firms to enter the market more easily.

He also said the DMR could make "specific interventions" in certain value chains to address constraints to new entrants such as skills shortages, access to international markets and a lack of infrastructure.

Meanwhile, Sandile Nogxina, who was appointed special advisor to minister of mineral resources Susan Shabangu in July, has reiterated the government's approach to beneficiation.

"The beneficiation strategy will provide a framework within which orderly development of the country's mineral value chains will occur," he is reported by miningmx.com as saying.

Mr Nogxina also said Section 26 of the MPRDA will need to be aligned with the beneficiation strategy "to ensure that there is sufficient feedstock available for downstream beneficiation".

He went on to stress that the government is "mindful" the nationalisation debate is having an effect on investors, but said he is "confident" the government will take the right decision.

Sources:

Beneficiation strategy to affect new mining licences (30/08/11)

Beneficiation 'not optional' in new MPRDA (30/08/11)

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