Every Friday, SAfm’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: Good news for the economy is that Swiss-based mining giant Glencore is taking steps to boost its investments in South Africa.
Creamer: This was wonderful news out of London this week reported by Bloomberg that Glencore, the massive big mining and trading organisation, is ambitious to do more in South Africa. It does believe that there are great prospects here and it is bidding for the Chevron sale. Chevron, the big company involved with refining in the Cape and also has a lot of fuel stations around the country, they are selling their assets.
One of the big bidders now is Glencore and that will mean something quite substantial for South Africa. Already, Glencore is in coal in a very big way and a big user of the Richards Bay Coal Terminal very successfully. They are also the world’s biggest chrome producer and get involved in beneficiation in South Africa, because it produces ferrochrome, which is far more valuable then chrome itself, so it exports that to the world. We see that now it is keener than ever to become part of South Africa and to develop more here.
One of the big things that happened with Glencore this week is a major analysis was done of the four biggest mining companies in the world. The study by Credit Suisse, which was a 150-page report, found in their reckoning that Glencore is the top pick. It is the stand-out mining company in the world, of all the big ones at the moment, this is the stand-out. We know that in February they shot the lights out with superb results and those reflect on our Johannesburg Stock Exchange. One of the things that Glencore did fairly early was not only listing in London, but also listing in Joburg.
At one stage it was also listed in Hong Kong, but that no longer exists, but its Joburg listing is very important to it. I think we can standby for some tremendous support in the new South Africa. In the report by Credit Suisse they also scolded all the other analysts and markets for not giving South Africa the credit that it deserves at the moment and still placing too high a risk on investments in this country, so that was another big plus for us.
Kamwendo: An Australian-funded company is moving at break-neck speed to reopen a rich zinc and copper mine in South Africa’s Northern Cape province.
Creamer: The Prieska area has always been noted for its copper and zinc. These two metals are really top of the class at the moment, their prices are very good. A person that read that very well was Errol Smart. He and his family emigrated to Australia some time back and they were working in mining there. But, he read the future and he also read the emergence of changing politics in South Africa and he has brought his family back.
They are now, under Orion Minerals, listed in Australia and Johannesburg, going hammer and tongs to make sure that they can turn the very rich deposits of zinc and copper in the Prieska area in the Northern Cape to positive account. They are accelerating in all fronts and one of the wonderful things about it is that they are getting the money to do it.
They are getting equity capital, debt that they need and the drilling there is superlative, it is just lighting up like a Christmas tree. Every time they drill they have fantastic results. Not only are they going to create a new mine out of the old mine that was there, the Anglovaal mine that was built in the 80s and employed about 4 000 people, the infrastructure is still there and they are renewing that.
They will get that mine going next year, but they see a much bigger prospect and they have got high-tech exploration going on in that region. Again, they are so happy with the results that they keep on saying South Africa doesn’t realise the quality of the assets that it’s got in the ground. They believe that there is a lot more of this to do in South Africa.
Kamwendo: South Africa has supplied all the equipment to the new car assembly plant that was opened by Volkswagen in Rwanda this week.
Creamer: We have the big car assemblers here. We have Volkswagen, Ford, General Motors, BMW, Toyota and Nissan all assembling vehicles in our country. That is fantastic, but that doesn’t happen elsewhere in Africa. They want to migrate this idea of assembling locally to other African territories.
We see that South African equipment, supplied from Uitenhage, is now working to assemble cars in this new operation in Rwanda, which opened this week. Also an earlier one in Kenya. The model that has been working so well in South Africa where you assemble locally in order to employ people and too make sure that you bring the local community into car manufacture, is now being migrated into firstly Kenya and Rwanda. Now they are talking to Nigeria.
They say Nigeria one of only two countries in the world where they have got 100-million people but they don’t assemble their own cars. They are hoping that it will also happen in Nigeria and possibly in Ethiopia. What is happening in the African continent is that the second-hand used cars, often not in such good shape, are imported in vast quantities onto the African continent and these then pollute the air and they are not roadworthy.
The idea is to try and cut down on the flow of that and to have an affordable car produced locally that people can get their hands on it and also create mobility. So they are involving in Rwanda Uber-type mobility schemes and all the others that move cars, so that they can start their own used-car situation. Once those cars then come onto the market as used cars it will be better, but they will have that initial new car philosophy and they are migrating the whole concept from South Africa into Africa.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.