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On-The-Air (09/09/2016)

SAFM-090916

9th September 2016

By: Martin Creamer

Creamer Media Editor

  

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Every Friday morning, SAfm’s AMLive’s radio anchor Sakina Kamwendo speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly.  Reported here is this Friday’s At the Coalface transcript:

Kamwendo: A far-reaching plan is under way to take South Africa’s struggling mining sector into the 21st century.

Creamer: This is the mining industry being led by the Chamber of Mines with an initial three period plan. The first is to get quick wins by actually reforming how we drill and blast, in other words using the existing mining technique, but then improving on it. That they want to do immediately.

Over the next three to five years they then want to look at that the way of mining very intensely and make sure that all the people are taken away from the vulnerable areas, so that you make mining far more safe. Then, over ten years they want to change mining fundamentally. All these will run in parallel, this is their plan at the moment and the target is to get zero harm obviously around the safety and also to extend mine life and retain jobs.

This is going to be people-centered. We thought it would be machine-centered, but they want it to be people-centered and skills uplifting is going to be a massive part of this programme. If they don’t go ahead with it we will see mining in gold starting to decline in 2019 and crash out completely in 2033. If they do go ahead with this, they believe they can get the equivalent of 11 new gold mines and eight new platinum mines, because they will be able to extend mine life. It is a very holistic approach that they are going for and making sure that the retain every single job.

But, then at the same time, we create a lot of jobs because of the way we will approach this industrialised way and the manufacture. It will mean that we will actually boost this economy as a whole, not just for mining because we will be creating the means to mine at depth, mine continuously at depth.

We know that all the mines of the world at one stage are going to go underground, they are going to go deep all those opencast mines. We will then have the way to do this and then we can export this equipment into that market.

Kamwendo: Lingering uncertainty about clean fuels is threatening to wipe out South Africa’s oil refineries.

Creamer: The warning was quite clear from the South African Petroleum Industry Association (SAPIA) Maurice Radebe this week when he said outright that there is such lingering detail now on South Africa’s clean-fuel policy that the six existing refineries are not going to be there in five to ten years.

They will be wiped out unless we get a decision from the Treasury on how the building of the clean-fuel plants are going to be incentivised. This is like a hardy annual, it has been going on for so long now, and the uncertainty is reaching a high point. We always hear from the Department of Energy that there will be a date at which they announce this, now the roadmap is going to come before the end of the year.

So many deadlines have been missed that the credibility in this area is now beginning to be glaringly obviously incredible. We must realise that this could change a lot of things. We are talking about the fuel, diesel and petrol, that we use for our cars, but it is also for liquid petroleum gas, LPG gas, and also input into downstream chemicals and plastics.

So, the implications are huge. Are we not going to process and beneficiate raw fuel? Are we going to now import clean fuels? These are the big questions that have to be asked. If we are importing something that is more expensive, what happens when this fuel price goes up and the rand and all that money going out? A lot of questions having to be asked.

In the meantime SAPIA pulling their hair out and saying we have got to have a decision on this otherwise we are just going to go down.

Kamwendo: The outlook for South Africa’s iron-ore and manganese mines remains bleak.

Creamer: Iron-ore mines a couple of years back were earning us a lot of money and the people working there, the 6 000 employees, became half billionaires at Kumba Iron Ore because there was so much money around that they cashed in their shares.

They then took a lot of new shares, which aren’t looking good at the moment. Then in manganese, as well, we had this great outlook, because we have, as a resource, such high-grade manganese and we were the biggest in the world and things were looking good.

We were even adding value over a large-scale of beneficiating the manganese into ferromanganese. But, we have suddenly hit a wall on the alloys, particularly because the electricity price and labour cost has become so high that the people who have been beneficiating the manganese are saying that they are no longer going to do it in South Africa anymore they are now going to do it in Malaysia.

The first furnace has just come on stream in Malaysia to do the ferromanganse work there. The second one for silicomanganese will come on stream before the end of the year.

Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.

Edited by Creamer Media Reporter

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