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On-The-Air (14/02/2014)

SAFM14feb2014

17th February 2014

By: Martin Creamer

Creamer Media Editor

  

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

Moodley: State of the National address last night, any thoughts you have.

Creamer: A very important deviation from his main speech where he said we are going to destroy the economy if we destroy the mining industry and he is not going to allow that. That was a very important deviation.

Moodley: ‘Mechanise or die’. That’s the message now being played out loudly and clearly to South Africa’s stricken mining industry.

Creamer: That's right and that is to the deep dark and dangerous mines. We are not talking about the open-pit mines, they have been mechanised ages ago. We are talking about the hard-rock narrow-reef mines.  

They say that unless you mechanise those now they are going to die.  Because the financial model the business model has collapsed, particularly with these huge wage demands. So coming through from the Centre for Mechanised Mining Systems, which is located at Wits University, are decades upon decades of research and development around this.

They now say that they have got the solution and they can combine now these low-profile machines, which they’ve had for some time, with the new blasting techniques. You can have low-profile machines rather then ultra low-profile machines that can get into that area.

There is so much to be made from that type of mining system because the special blasting techniques alone are worth about 30% increase on the gold price and maybe 35% on the platinum price.

They give you the backfill so you don’t have to bring that to the surface so they cut your costs in that way. With the blasting techniques you just get the gold and only the gold alone, or the platinum and only the platinum.

There is also AngloGold Ashanti, which is coming through with a raise boring system, which will change the whole face of mining. That is really a leap to automation, but people are saying that in between that, unless we mechanise now, we are going to die.

Moodley: Still talking about people, the President said 2014 is a reminder to mining companies that this is their deadline to improve housing and living conditions of mineworkers and to achieve a number of various different targets. A message to the companies quite strongly.

Creamer: They normally use the stick on the corporations and the carrot on the workers. The stick is again being applied and saying you can’t have this sort of situation within these informal settlements around the mining fences where people live in such squalid ways, because of this living-out allowances.

Houses have got to go up and we are also going to cooperate through our municipalities to do that. But, April 2014 is the companies’ deadline. You took commitments into the Mining Charter and you better have things done, is what the President is saying.

Moodley: Talking about carrots, R21-billion is the value of cash being paid to shareholders of South Africa’s richest iron-ore mine.

Creamer: R21,7-billion going into the hands of black shareholders. That is more then we paid for our ten stadiums for our soccer World Cup in 2010.

That is an enormous amount of money that has gone through since this company Kumba Iron Ore listed. That is an Anglo American group company. It is an absolute model of broad-based black economic empowerment. On one side you get the corporate benefit because Exxaro gets 20% flow of those dividends so it can build a new black controlled mine and it has been hugely successful in the coal space. On the other side you get the social development, because the community gets 3%.

The workers get another 3%. So of that 26% you have got 20% going to the corporates and that is black economic empowerment and you then have 6% going to the community and the workers. We saw that they turned their workers into half millionaires the last time they paid out that cash amount.

And now 2016 coming up for another big payment they will turn their workers into millionaires next time round. Just shows you what mining can do when it is pumping well.

When the prices are good like in iron-ore and the demand is good from China and where the logistics move around you can really enrich your people. It floats all boats, it floats the corporate boats, social boats and it floats the small and the big.

Moodley: Mining industry agrees to devote 5% of its payroll to the development of technical skills.

Creamer: The mining industry has agreed to devote 5% of its payroll to the development of technical skills. Technical skills we are so short of them and this will be artisan training and support for increasing the pool of engineers of which we are so short.

Within that there is also in the State Presidents speech the focus on FET Colleges and how these will have to be linked to industry just as we see in Germany you work and study at the same time.

We need to have that sort of approach to really get the best out of our people and the best understanding of what you’ve got to do in the work place. With the Mining Charter deadline there are also some obligations there for skills.

So an important agreement reached with business, labour and government to devote 5% of the payroll to the development of mining skills.

Moodley: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back with us at the same time next week.

 

Edited by Creamer Media Reporter

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