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On-The-Air (30/10/2015)

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30th October 2015

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: The concept of cross-border diamond collaboration was put forward at this week’s Diamond Indaba.

Creamer: This is the first ever Diamond Indaba we had in Joburg and it was really sad to listen to the way the diamond beneficiation industry has been decimated and how now they want to try and resurrect it and how difficult this is going to be after the industry has crashed.

We heard with quite concern that it was India that is actually taking a lot of the rough diamonds that we used to process here, because India first took a very small niche, all the low-value small diamonds. But, they built up human capacity and technology so well, that they are now advancing into the bigger diamonds. It shows you if you take a humble niche and you really work at it, you can actually start ceasing the market share.

People are saying how are we going to get back to where we were before? This was organised by the State Diamond Trader and one of the suggestions were put forward by the head of De Beers Barend Petersen that there are a lot of regional aspirations here, should we not do some cross border collaboration.

Is that not going to strengthen us? Should we not also be very conscious of the niches that we should take? We see that the aspirations of Botswana are huge in this area, they have done very well. But there is also Namibia, Tanzania, Zimbabwe and Angola with similar aspirations to what the South Africans have.

Are we going to go at it alone? The urging was don’t forego this opportunity to actually go collectively. One thing that is happening in Africa at the moment is that Africans are keen on not just exporting their raw materials as they used to do. This hymn sheet is a common hymn sheet throughout Africa, so why not start in Southern Africa and try and collaborate so that we can rebuild this industry with a strong model and work out this model first and hopefully we can do it, because it is not going to be easy.

What role will the government play in all of this? We see that the government is coming forward with an idea that they will have an Industrial Development Zone at OR Tambo where people will be incentivised to bring in equipment that will not be subject to taxes and that they will be free of vat and a lot of other things that are impediments to try and rebuild this industry that we have lost where we used to have 4 500 participants and we are now down to 200 and struggling.

Kamwendo: Drones, artificial intelligence and robots – they’re all part of the ‘mine of the future’ as outlined in the City of Gold this week

Creamer: Yes, this was from Gold Fields CEO Nick Holland, who delivered this particular paper ahead of going to Australia to deliver it, because of course, Gold Fields now has a lot of mines in Australia as well, they only have one left here in South Deep, which is completely mechanised. They also have operations in Peru.

They are saying that the pace of change in mining is moving fast and you better jump on the bus. He was outlining how we might say he is talking about the mine of the future, but in many instances it is the mine of the present. Drones are already being used in his mines both on surface and underground in Australia.

We know that artificial intelligence is being brought in, robotisation. He was talking about the driverless trucks that just sweep across the iron-ore fields of Australia, already working 24 hours a day, 365 days a year. This is the sort of modernisation that is advancing so quickly, which he sees having to come everywhere, including South Deep. He is saying not only is it equipment modernisation, it is the mentality modernisation and an ownership change.

Everyone of his nigh-4 000 workers at South Deep is a shareholder now. The model of what the ownership will be in future, exactly how much involvement in government will come through. He sees the Debswana model where there is a 50-50 ownership where the State will have a 50% share. He is saying that this model has worked so well and can be put into the system here.

The driverless situation, we have had that in Finsch Diamond Mine for a long time now. We have got other concerns, like job concerns, so you can’t move as fast as they do elsewhere in the world. He is also saying they involve the community in building all their mines in Peru. The Cerro Corona mine, community members actually were involved heavily in creating that mine. This is the thinking that is going on where they used to fight with the non-government organisations they are now embracing them as part of the family.

The boards of directors are wanting to know everything that is going on in the mines. So, you have got to use top three-dimensional technology, so they actually can be taken into the mines, even though they are sitting in the boardroom, they can do a trip of the mines on 3D and see exactly what is in there. The same with roadshows, when you go to investors, you can actually show investors exactly what you are doing. A massive leap taking place in mining. We know that even at Wits University they have been using these drones to try and gather information that is useful in mining.

Kamwendo: Mining employees received close to half of the mining cake last year – with shareholders having to be content with the crumbs.

Creamer: These are hard figures. So they looked at more then 30 companies on the Johannesburg Stock Exchange, mining companies. This was done by PriceWaterhouseCoopers and the percentage of 3% is what went to the shareholders. We should lament that because that is us. It is our provident fund and pension fund.

A very good sum of 45% to the employees, which they feel is unsustainable. The cake is really in an interesting phase at the moment where the actually investors are getting very little and employees getting a lot.

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.

 

Edited by Creamer Media Reporter

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