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: Gas represents a R250-billion opportunity for South Africa, according to McKinsey, one of the word’s foremost global consultancies.

Creamer: Yes, McKinsey put out a very interesting report and sketched the potential for gas in view of the fact that we are going to have this gap in energy supply from 2025. They are saying make sure you start working on this now. What are you going to fill this supply gap with the electricity energy supply gap? Why is this happening? Because, there will be existing power station that will be taken out of service. We know that when we try to keep some of the power stations and put them back into service, it is not the easiest thing, because a lot of the equipment used becomes outdated. It becomes very expensive to try and keep these things going.

We can take it for granted that we are going to have stations taken out of service, which is going to lose about 14 000 MW with Kusile and Medupi coming in they are not going to fill that gap. There is going to be an energy gap from 2025. They are saying the best and fastest way to do it is through gas. We are saying that we don't really have gas firmed up now and they are saying start with Mozambique, there is a lot of gas there. Sasol is already bringing through gas. We know in Johannesburg we are already using Mozambique gas.

Then you can start building up your own gas supplies. We see the government also said that it is an immediate focus. They do want to try and start encouraging drilling through putting up regulatory framework we have heard about and all the ocean activity that government wants to promote. So, it could just be that gas starts coming into the mix quite strongly and the potential there is to create a whole new industry. The National Development Plan also encourages the use of gas.

Kamwendo: The petroleum refining industry this week became the latest sector to warn of survival risk.

Creamer: We have had this tick-tack with the government going on since 2010 where the South African Petroleum Industry Association said it is going to cost R40-billion if we are going to clean up the fuel, the Clean Fuel Two process, which we are talking about here. We actually had a deadline of July 2017 as the implementation date. We can see that is not just going to happen.

This week it was made clear that it wouldn't happen by the Department of Energy. Journalists then asked what is the new date? They said that they can’t give a new date until they have an agreement. The next question was, when are you going to get an agreement? They say by November, but it has been a hardy annual. It has been lingering uncertainty and we know we get into our cars everyday, we don't want to have insecurity of supply. We are falling behind the world with this cleanness of our fuel.

We are talking about equivalent of Euro Five, the Europeans have gone way beyond that already. We know that in the Middle East in Asia they are building up this cleaner fuel. We are not doing it. That could mean that an industry starts to suffer. They warned, the South African Petroleum Industry Association, that similar pressures are building up to what the steel industry is feeling now. We know the steel industry is really hit a bad turn. Evraz Highveld in business rescue. ArcelorMittal crying for help. We don't want that to happen in a very strategic industry like fuel.

So, we just hope that the government and the industry can put heads together and work on a cost recovery mechanism that the industry is looking for and make sure that we have this industry and it is a sustainable and profitable industry and we don't have to import completely beneficiated fuel, which will send our current account the wrong way.

Kamwendo: Gauteng’s gold-from-dumps miners are making heaps of cash on the strong rand gold price.

Creamer: This is not the Zama Zamas as you are talking about. This is the formal side of it. As we pass the mine dumps we wonder are they turning them to positive account. The listed companies like DRDGold, which is listed in Johannesburg and New York, we saw that their revenue jumped to R2-billion in the last 12-months and they are pumping cash.

They are sitting on over R300-million in cash and this is a legacy which can be a real burden. If you can turn it into account like they are doing, you release ground. Now 194 hectares of valuable ground was released of these dumps and at the same time the gold price at the moment in rands is very attractive. We are not having to mine this material, it is there being mined and has got the gold in.

All you have to do is remove that and there is the dust issue. We see that DRDGold has worked very strongly on that on thousands of measurements of dust. I think they exceeded the limit only 31 times and they are saying it is 31 times too many. We are going to really go to zero here. There is no dust problem by vegetating the dumps. You can see that they are spending their money quite well and being quite sensitive in near mine communities already trained 600 youth in extra maths and science lessons.

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.