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: South Africa’s struggling steel industry is calling for protection, which the government seems ready to provide.

Creamer: I think you have always got to get the best out of a crisis and perhaps we will get the best out of the steel industry, finally, because government and steel industry have been at loggerheads for some time now. They are having to sit down and talk and, of course, we see how bad it is where Evraz Highveld Steel went into business rescue recently and it looks like the business rescue isn’t really working and it could go into liquidation. The bigger one ArcellorMittal is also requiring some government protection and we see it evoking the application that is in to provide it with a 10% protection. If an import steel comes in you can put a duty of 10% on that to protect the locals. The holistic solution is in discussion and it seems as though by September they will have an answer to what we are going to do with steel. We know that China is not using the steel like it used to because the slow down in that economy and that steel has become available to the world. There is a global glut of steel, the price has gone to multidecade lows and it has impact on our Vanderbijlpark and Newcastle steel mills, under the ArcellorMittal umbrella. This goes back to the old Iscor, which was nationalised and eventually privatised. We were hoping for a developmental steel price that never came and now perhaps, finally, there will be some sort of fair pricing structure for steel locally and perhaps we wont be hit by that very big import parity price situation, which lifts the steel price. The talks are there and I hope that the trust deficit will finally melt away and we will get a holistic solution on steel.

Kamwendo: South Africa’s Richards Bay Coal Terminal is going from strength to strength under the smart leadership of Nosipho Siwiza-Damasana.

Creamer: I must say, I was there yesterday and again impressed, because when you see the stockpiles of coal, we know that as those go out the foreign exchange comes in. So it is a huge foreign exchange mechanism and we know that coal is the biggest commodity export for some years now, taken over from gold and platinum. You have to have efficiency there and you do see it when you go down to Richards Bay. That private-sector port works well with the public-sector Transnet. There was a time where it didn’t, but we can see that it is over and again the trust deficit between business and government starting to be moved out of the way and that is going to be the solution for South Africa. Under Nosipho Siwiza-Damasana, I must say that team down there is doing a splendid job. We have always said that you should invest in the downtimes, when things are bad like now, that is when you should invest and that is what we see. She has now gone ahead with a R1.34-billion investment at a time when South Africa needs these investments, because then you have contractors looking for work they are sharpening their pencils. You have got project managers eager to get work and this replacement will again be such that when the good times return in coal, you will have this new equipment in place. I must say that the old equipment has really been a great workhorse. It has been going for 39 years and it has done so well because of the great maintenance team there. We have got to learn to maintain things as South Africans and they are certainly an example of how you maintain things. Again Nosipho Siwiza-Damasana is not saying that they are going to import all this replacement equipment. She is working on a 57% local content. That is very important in the South African context at the moment because our factories need work. She is saying that she wants to put R768-million worth of the overall investment into the local content, into South African content, and at the same time she is looking to the people of Richards Bay and not wanting to neglect the near-terminal people. She is saying that she wants to try and devote about a local content of 18.2% to the Richards Bay area itself, which will be worth about R140-million to the area. All round you see good work being done and the work being done in conjunction with Transnet, which is the State Enterprise. If we have big business and government working together we could get ourselves out of this doldrum in which we find ourselves. It also needs some policy injection from government, because policy is also important to get things going in the economy.

Kamwendo: South Africa’s much-publicised Swazilink rail project is being delayed.

Creamer: It seems that the Swazilink rail project, which was meant to debottleneck the coal line, to allow more tons to go along that. They have run into geological problems and it really is probably the best time that could happen, because we know that the actual economy is down at the moment, so the freight going on the line is not as great as it used to be. You can afford to have a delay so instead of the Swazi rail link coming in around 2018, it is likely to be more around 2019 and 2020. That, of course, is being managed by Transnet Freight Rail. We see that Transnet Freight Rail has also looked after itself with regard to take and pay schemes, which means that its financial results release this week were quite strong.

Kamwendo: 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.