As always on a Friday at this time, AMLive is joined by Martin Creamer, Publishing Editor of Engineering News and Mining Weekly. Martin, a very good morning to you.
We often talk about links with Latin America, I’ve never heard of Peru being involved but you have got something interesting there.
People from Peru are helping South Africans to develop downstream gold activities in the Free State. The type of jewellery they are making now is called gold-rope chain. It is called rope chain because its appearance looks like rope. Americans buy $1,4-billion worth of this rope chain a year. Ten thousand families in Peru actually make rope chain as a home industry. What has happened is that Peruvians in the know stumbled into South Africa by chance on a jewellery mission, they were looking for earrings, and they realized that they could go downstream in South African with a lot of support from the likes of Harmony Gold, Department of Trade and Industry, the State-owned Industrial Development Corporation, also the aerospace company BAE Systems-Saab. If you go down to SARM, which is South African Royal Manufacturers, you will see 700 people at work and this is quite interesting because the investment that has been used to create these jobs have been nothing as high as the investment one would have to make in mining to create an equivalent number of jobs. So taking gold downstream does create a disproportionately-high number of jobs. SARM has already exported R24-million worth of product because these particular Peruvians have got contacts with networks through which jewellery can be sold into the United States. And the tie-up with Royal Chain of Canada is another plus, as is the know-how of the sales leadership. This will allow South Africa to sell R120-million worth of gold rope chain in the first year and SARM believes it can challenge some of the world leaders in the mass jewellery market.
The World Trade Organisation gets ready for another gathering in September. I believe government wants local business people to get some input.
We had, from the World Trade Organisation or WTO in 1999, the Battle of Seattle. In 2001 we had the Disappointment of Doha. Now, I think we are heading for what could be the Chorus of Cancun in Mexico, which will be the site of the next WTO meeting. Ahead of that, the South African government has put out a Gazette notice, as it did before the Uruguay round, which led to the actual formation of the WTO, saying to South African business that local business leadership needs to become involved in the next WTO round very intensely. The South African government wants feedback from South Africa business leaders in a prescribed format, beginning with agriculture. We know that a lot of our agricultural products can’t find access to global markets because of the many impediments put in their way, but also the subsidisation of agricultural exports by large developed economies creates a market distortion. So, government is saying, tell us how you are bumping your head against this, what ways can these impediments be removed and give us a reply in prescribed format. Also on the industrial side, what export markets are you interested in and how can a multilateral type of organization like the WTO assist developing countries. I fear some of the deadlines of the Doha Round may already have been missed and it is hoped that developing countries like South Africa don’t lose out on anymore potential for trade.
Of course, while the ideas are being hammered out, the doers keep doing. The reach of South African business keeps getting longer. This one really stumps me – Nepal.
It is amazing how far some of our exports extend. South Africans are exporting far and wide into traditional and non-traditional markets. We see the company Fluidex of Gauteng exporting as far a field as Nepal. The company is in the field of purification and regeneration of ageing transformer oil and has actually exported regeneration plants to many countries. It will commission the regeneration plant very soon for the Nepalese Electricity Authority. About four months later, it will be in Sweden, supplying a similar regeneration plant there, as well as later in Cyprus and Dubai. In fact, 90 % of the products manufactured in South Africa by the company are now exported.
Thanks very much. Martin Creamer is publishing Editor of Engineering News and Mining Weekly and he will be back with us at the same time next Friday.