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Metals, Machinery, and Mining Equipment Industries in South Africa: The Relationship between Power, Governance, and Technological Capabilities

Andreoni, A; Kaziboni, L; Roberts, S; (2021) Metals, Machinery, and Mining Equipment Industries in South Africa: The Relationship between Power, Governance, and Technological Capabilities. In: Structural Transformation in South Africa: The Challenges of Inclusive Industrial Development in a Middle-Income Country. (pp. 53-77). Oxford University Press: Oxford, UK. Green open access

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Abstract

The metals, machinery, and mining equipment industries have been at the heart of South Africa’s industrial ecosystem. Their central position is associated with the long-term importance of mining, with which there are extensive demand- and supply-side linkages. This chapter reviews key turning points in the development and restructuring of these value chains in post-apartheid South Africa, from 1994 to 2019. The overall record is of a basic steel industry that performed better in terms of value added relative to the more diversified downstream industries, despite government industrial policy targeting more labour-intensive downstream industries. The downstream machinery and equipment industry struggled to compete with imports in the 2000s and 2010s and only partially engaged with digitalization. In explaining these developments the grand bargains struck by the state with the main company producing basic steel and the use of procurement as a demand-side industrial policy are critically examined. The chapter also provides micro-level evidence of the evolving relationships between mining houses; engineering, procurement, and construction management services companies; and input suppliers along the value chain. Overall, it is argued that the relatively poor performance of this industry grouping in South Africa has been due to power asymmetries along the value chains, upstream concentration, high levels of fragmentation in the domestic ecosystem, the lack of key institutional ingredients, and poor policy design. Lessons for resource-endowed middle-income countries are discussed, and policy challenges for upgrading and diversification are presented.

Type: Book chapter
Title: Metals, Machinery, and Mining Equipment Industries in South Africa: The Relationship between Power, Governance, and Technological Capabilities
ISBN-13: 9780192894311
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/oso/9780192894311.003.0003
Publisher version: https://doi.org/10.1093/oso/9780192894311.003.0003
Language: English
Additional information: © Oxford University Press 2021. This is an open access publication, available online and distributed under the terms of a Creative Commons Attribution – Non Commercial – No Derivatives 4.0 International licence (http://creativecommons.org/licenses/by-nc-nd/4.0/).
Keywords: structural transformation, metals, machinery, mining equipment, South Africa, technological capabilities, industrial ecosystem, governance, industrial policy, competition policy
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Inst for Innovation and Public Purpose
URI: https://discovery.ucl.ac.uk/id/eprint/10135283
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