AMLive anchor Sakina Kamwendo on Friday presented another Update From The Coalface with Martin Creamer, publishing editor of Engineering News and Mining Weekly.
Creamer: Studies are under way for the possible building of big new mechanised platinum mine on the Limpopo/Mpumalanga border
Kamwendo: Tenders are expected to go out next week for a big, bulk sample and this is within the precinct of the Booysendal mine that is the Northam Platinum mine that has just got going in fact, but right next door is now a possibility to do a different reef. The existing Booysendal mine is what we call the upper-group 2 reef which contains platinum. It’s quite a wide reef, so they chose mechanised mining, but now they think they can extend the mechanised mining to a narrower Merensky reef and that’s why they’re doing this bulk sampling, which could become a potential boxcut and a new mine as we look forward. It’s the opportunities out there that are being taken and we see a very happy work crew in this wonderful setting in the valley close to the Mpumalanga border in Limpopo and 1 200 people employed there, most of them local people. When I spoke to them I find that they go home to there families at night. This is a bus in-bus out so there’s none of that migrant labour problem. When I whispered into the ear of a man driving a very big 2-boom drilling rig, I said, “look, are you getting the magical 12 500?” He laughed and said, “I’m way beyond that.” We can see that if they can extend the same sort of mining into the Merensky reef, as they call it, they can have greater safety, because this is a world-class safety performance that they are putting there and also pay these higher salaries, but of course you need skills and that’s why they want to have the same skillsets, because they are training these people. They’ve got wonderful simulators there that organise the training for them and this is Northam Platinum at the Booysendal mine, where people seem to be working very happily.
Creamer:There are complaints that de-beneficiation is taking place in South Africa’s ferrochrome business
Kamwendo: The magic word has been beneficiation, we hear it on the words of industry ministers and mining ministers and say, let’s get the beneficiation, let’s get the industrialisation. There’s one place where it really have really beneficiated, it’s a great beneficiation story, it’s ferrochrome. It’s 200 000 people which produce a gross domestic of R42-billion a year. That’s like saying we can have our World Cup stadiums, the ten of them, times two every year, that sort of contribution, but it’s going into de-beneficiation and we get that warning from none other than Alistair Ruiters, who is our former Director General of Department of Trade and Industry, now in ferrochrome mining, and he’s saying, “look, this is not a beneficiation story, this is de-beneficiation.” Why? Because the state entity has not come to the party with energy. If you look at it we have lost our leadership position to China, China is now the biggest producer of ferrochrome, no longer South Africa. Who’s giving it the raw materials? South Africa. Between 2004 and now we’ve increased the sale of raw chrome-ore 60 times, so we’ve uplifted it 60 times. We used to export 100 000 tons to China, now six-million tons. So we are actually creating a new high-value industry for China and de-beneficiating so that we get the low value, because when you move the chrome to ferrochrome you lift the value six times. We are losing out on that now. It’s a sort of lip service that’s paid, and we’ve got to be careful of lip service, because here we’ve got a beneficiated industry, which we are de-beneficiating.
Creamer: The Botswana government’s policy reliability has been highlighted in the opening of a brand new diamond mine in Botswana
Kamwendo: This is what I found when I went across the border to Botswana, and it’s only an hours’ flight from Johannesburg to Gaberone and you get out there, you see a new airport. There’s a nice flashy new airport. You go into town you see new hotels. You go to the shops, you see new shopping centres. It’s just a fascinating attitude, particularly with regard to the reliability with government policy. All of this is built on mining. Mainly diamond mining. So now you go to a new diamond mine and the person who’s opening this first underground diamond mine there says it wouldn’t have been possible without this policy reliability from the government and investor certainty. Now he’s saying, “why? Because I started building this when everything collapsed in 2008. I couldn’t get any money from the bank, I had to put the billion pula in from my funds from the mining in Lesotho. Now, I did that because I got such exceptional government support.” At the opening, the President was there, and also the Minister of Mines saying, “we’re going to go further along the value-added path in Botswana.” Now already you have seen, why have they got all those hotels? They have taken the centre of gravity, of diamond aggregation and trading, from London to Gaberone. They’ve managed to get that centre of gravity there, so now you’ve not only got diamond mining, diamond sorting, diamond aggregation and trading and the people then come into Botswana to do that trading, but the government and the President from his speech said, “we are now going to go a step further, we are going to do jewellery and retail.” Now, obviously that is a very tough ask, he’s not going to as the Minerals Minister explained to me, “look, we are not going to grab a huge slice of that, but we are going into it, because there’s a niche for us there and we can have special African-themed jewellery” and he said to me, “as I’m speaking to you, I’ve got people now training for that,” because they’ve also cracked the code with the diamond polishing and cutting. They’ve now got 21 diamond polishers and cutters there so it shows you that if the government goes into something and supports it you can really do things. And it’s that policy reliability which is so, so important. We’ve just heard people like Ivan Glasenberg coming here from Glencore, saying, “smart governments, they attract, they encourage foreign-direct investment. Why? Because the countries need it.” He’s in coal and he’s in ferrochrome as well, but he’s saying in coal, can Eskom build the coal mines that it needs? The answer is probably, they haven’t got the funds, so you need someone like Glencore coming in saying, we can put in wads of money into this, let us work together. Foreign-direct investments, South Africa cannot do without it, and smart governments attract that and we see now in Botswana how they are attracting that not only in diamonds, because they want to diversify away from that, we see them doing it in coal. They go to coal mines and say, “look, is it working, are our policies working?” They interrogate their own policies. They’re now trying to get copper going in the same way. And very encouragingly, they have discovered iron-ore, but a very, very big ore-body of iron-ore. It’s across 35 kilometres and they are still drilling. You can see that diversification may come in there from good, reliable policy.
Martin Creamer is publishing editor of Engineering News and Mining Weekly. He’ll be back At The Coalface at the same time next Friday.