Every Friday, SAfm’s radio anchor Sakina Kamwendo speaks to Martin Creamer, publishing editor of Engineering News & Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Kamwendo: The highly successful growth strategy of Northam Platinum has created 8 000 jobs, 2 000 this year.
Creamer: It would be wonderful if all companies could do this. They work on a countercyclical strategy. So, when things are down, they lay the foundation to grow. When things are up, they benefit and have a much bigger staff complement. This is exactly what Northam Platinum has done. In 2015 they planned this and it has worked out to perfection.
What is happening now is that the wage bill is at a record level of over R5-billion. The taxes that they paid are also the biggest taxes Northam has ever paid in history, R5,1-billion. You hit the high point if you strategise very well and this is what Northam Platinum has done. Northam has got four platinum footprints in South Africa and it is expanded each one of them. Even the oldest of the footprints surprised everybody, because despite Covid, this particular mine produced more than 1-million tons of output, which hasn't been done since 2006.
At the same time, Northam concludes five-year wage agreements, so they don’t have to go talk to the unions every year on a new wage level, they plan it and they do a five-year agreement, which they have completed for their mines. They also build fantastic housing. I have been out there and seen the affordable housing that mine workers actually buy and it becomes their property, but they do it in a way so that it is affordable. All sorts of beneficial things being done by Northam Platinum that are very laudatory.
Kamwendo: A new way of producing platinum slashes electricity use by a whopping 82%.
Creamer: At Sedibelo, near Rustenburg, there is a new plant being built as we speak. It uses a new technology called Kell technology. This technology has come out of South Africa and been refined in Australia, but it is going to reduce the energy requirement that electricity requires by 82%, at a time when South Africa really needs this. Normally, when you are producing platinum, you bring the ore out of the ground and you smelt that; you use a lot of heat in a process called pyrometallurgy.
An enormous amount of electricity is needed to melt that ore down and produce these metals. What this Kell does is what they call hydrometallurgy. It doesn’t have that same need for huge heating, but it is even better, because the electricity is so low and beneficiation is so high. You actually get a refined product on site. We have never had that before. So, you have a product that is ready to go to market, to the end consumer, being done on site. I think it is going to be a game-changer and that other platinum mining companies are going to have to look at this.
We want beneficiation here and it is also good to have beneficiation on site, because it employs the people of the community around that mine and builds their rural areas as well. This has got both, it has got very low electricity and very high value addition. For too long value has been added outside South Africa. We need to do that in South Africa and they can do it right on site with this incredible Kell technology.
Kamwendo: Mozambique’s aluminium is outdoing South Africa’s aluminium because it is made with clean electricity.
Creamer: These days, the market is looking at how you make your products. If you burn coal to produce electricity, as we do in a widespread fashion in South Africa, they cold shoulder that product, because they say it has been made with dirty energy. What they are doing now is that they have got two levels of prices. If you produce aluminium in a fashion where you are using renewable energy, clean energy, you get a price premium on the London Metal Exchange.
This is benefitting the Scandinavian countries now, largely because they use hydropower to produce their aluminium, and they are getting a price premium. Whereas in South Africa, at Hillside in Richards Bay, we are still producing our aluminium using power from Eskom, which is heavily coal orientated, heavily carbon orientated. It cannot fetch the same price anymore that green aluminium fetches. That is why you find Mozambique has suddenly sprung up. We find South32 is increasing its shareholding in Mozal Aluminium and to control more than 70% of that asset, because it wants to get greater control of the Mozambique operation.
Why? Because that aluminium is produced using hydropower, which is regarded by the world as being green and clean. So, suddenly we have very big discrimination. If you are going to make something, you have got to do it cleanly. South Africa has got to realise this and they have got to move fast. We are blessed with Eskom going along with this, they are wanting to produce more renewable energy, but it will take time. In fact, we haven’t got that much time, because as you can see they are starting to eat our lunch even though we have been doing great stuff with our aluminium at Richards Bay. If the market says no, this is not the premium grade so you are not getting the higher price, that is not actually good for our economy at the moment. We need to re-strategise very quickly and put a lot more solar and wind power into the national power grid.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News & Mining Weekly.