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On-The-Air (14/03/2014)

SAFM_140314

14th March 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: A new digital mine’ under construction in Johannesburg aims to take modern satellite communication underground.

Creamer: Firstly, this ‘digital mine’ under construction aims to take modern satellite communication underground. What it is saying is that these mines are deep, dark and dangerous, they are not Internet enabled. The idea is to make them Internet enabled so anything that can happen on surface, they want to happen underground.

This is Wits University School of Mining and Engineering. They are the ones that are building this mock-up. It is an imitation mine, when you go to their school you will see below their school this is taking shape. There is an actual mine tunnel there that you go into.

When you go down the stairwells they are actually sending down signals in a vertical pathway through mining steel structures to see how they go through the geometry and what actually happens there. They are putting a lot of steel into this tunnel as well because steel normally causes problems with satellite communication. The whole idea is to bring mines into the 21st century.

That can be the starting point, but its not the finishing point. This is an interim solution to optimise mining in South Africa, so you can actually control what is going underground from surface. This, first is to make it very safe, the second is to make it more profitable and then once you’ve got that going, to use that cash to actually bring in something totally new and that is where Wits University’s Prof Fred Cawood, who is the head of the School of Mining, that we have got to start that research now. It is going to come up later, this digital mine will be an interim phase. You have got to do something much bigger and mine much differently if we are going to be profitable.  

We’ve got these fantastic assets. They are marvellous in that they go on for ever, but they go deeper and deeper and deeper. As you go deep, your profits start to get squeezed and unless you come up with a totally new solution now, a future mine, you are not going to be able to mine that. It gets better and better as you go deeper, so we are losing out on treasure. That is why they are saying that we are falling behind.

Comro, which is the Chamber of Mines Research Organisation, has fallen apart and doesn’t really exist anymore. There is no real thrust in the centre. So, individuals are going along and working and we saw with AngloGold Ashanti coming up with an excellent solution with their raise boring which mines the gold and only the gold, all the time, safely.

Then you have got other situations instead of shattering the rock you use a mechanised form and with different blasting. In actual fact other countries are way ahead. We see in Australia they have got a trademark future mine. They have all driverless trucks and trains, so we are really needing to catch up.

Moodley: I hope you invite me the next time you have a chance to go down one of these mines. Sounds fascinating.

China is decimating South Africa’s once mighty ferrochrome industry – ironically with South African assistance.

Creamer: China has really got such inroads into our ferrochrome industry at the moment. We used to have 50% of the market, we have got more chrome then anyone else in the world, but along comes China and it imports the raw chrome.

So we supposed to be beneficiators now, so Merafe, which is the black-controlled company on the Johannesburg Stock Exchange with ferrochrome production, they over a series of years now have gone to the government and said and your official policy is beneficiation, what we are doing it beneficiating chrome, we are adding five times value to the chrome.

What is happening is that our chrome is going out of the country to China in a separate channel and they now are importing, they are not producer of or host any chrome themselves, and India in fact have cut off the chrome to them because they want to make sure that they can add value like we have been doing here, where we add five times the value.

The government was also hit by lobbies on the other side, because platinum industry has had a struggle at the moment. Platinum also generates chrome with the Upper-Group 2 so they wanted to sell it to China.

So half of that chrome is going out to China. So the Minister's hands became tied and Treasury’s hands became tied, because they were being lobbied from two directions. Eventually they said beneficiation will just have to be put on the backseat.

Merafe, with a big Bafokeng shareholding, is saying that they have given up on asking the government for a duty, on asking them for a central channel of marketing, they are going to try now and allow more market forces to win this, because it is unsustainable what the Chinese are doing. If the shipping prices go up and the transport costs go up, then China is going to have a real battle.

They also have a downside on the pollution, because they pollute the air like crazy and meanwhile South Africa is coming in with this Glencore Merafe Lion 2 project where it is a low-energy new project coming in with more of our own chrome and hopefully our margins will be so good that we can start stealing this back.

But in the meantime China has got 37% and we have got 34% and half the chrome they use is from South Africa.

Moodley: New gas finds in neighbouring Mozambique have attracted the attention of South African fuel giant Sasol.

Creamer: Sasol looking at neighbouring Mozambique attracted the attention of fuel giant Sasol. They have been there for a decade already and we know that they have got the pipeline coming through.

They did the Temane and Pande scheme onshore. They found gas and brought it down to South Africa, used some of it at Sasolburg to create chemicals. They have found a lot more of it in northern Mozambique. Onshore they are looking and offshore they have got concessions.

They are saying that there is more gas than their original plan of liquefied natural gas. The magic GTL is Sasol’s magic wand where they can turn the gas into oil equivalents. You have got a low gas price now because of the shale gas all around the world and high oil price. So if you can have oil equivalents you are really in business. So they are looking at possible gas-to-liquids there.

But, then they want to go further with gas-to-power possibilities. Already we see them with a little power station their with 140 MW going in to part of Mozambique there which is a mimic of what they’ve got at Sasolburg. So, doing a lot there and looking for some sort of regional cooperation on oil-and-gas.

We see Wits University already is going to bring in a BSc for oil and gas because they are starting to skill up for this new hydrocarbon age. We still seen as a frontier in hydrocarbon and they are starting to prepare the skills as this develops both on the shale-gas front, offshore front they are hoping to have people with degrees going into that industry.

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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