https://www.miningweekly.com

On-The-Air (05/12/2014)

5th December 2014

By: Martin Creamer

Creamer Media Editor

  

Font size: - +

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: A spotlight is at last being shone on the secret stocks that have been befuddling our platinum price.

Creamer: Five months of strike and we saw the price fall and people wondering exactly what is the supply position with platinum. Since 2008 global financial crisis, people have been hoarding on-surface stocks.

These have been released at this time, so in order to get a handle on the market people have to know what stocks are on surface and when they are going to be released. This is being done by the new World Platinum Investment Council. This is a new body that has been bought in last month, heavily South African orientated.

hey are looking at what they call these confidentially held vaulted stocks and they are putting a figure on that so people can start seeing exactly what the position is with platinum and how it is going to affect price. The good news is since 2012 these confidentially held secret stocks have been declining.

They are still at a high level of about 2,5 million ounces. So, even when the publically announced stocks reveal a deficit, that deficit in supply become academic, because these people can at any stage put this platinum on the market. I think there is going to be a reluctance of investors to come forward. We even see now that the investment in platinum has fallen in 2014, not as high ass 2013.

People suddenly realise there can be a strike, but these secret stocks can be put on the market and it can actually bring the price down. So, we are actually getting a much better handle on the stock position of platinum, which is so vital to us because it affects the price.

Kamwendo: Gold and platinum mineworker numbers are expected to fall 8% a year in the next two years.

Creamer: This is the word from Teba Limited. They are the biggest recruiter of mineworkers, a longstanding recruiter. Teba says there is just no demand, they are going to do no recruiting for the whole year and probably the next 18 months.

They say that the numbers in gold mining and platinum mining are going to fall 8 % a year over the next two years and into the future. They believe that it will be catered for with natural attrition as people reach retirement age and it can be put on early pension, because mine owners are complaining that there is a surplus of workers at the moment and they are having to deal with this.

They also report a complete change in the demographics of the mineworker business and saying that in 2003, 60% of people that worked in those mines used to come from foreign countries. Now this is completely reversed and less then 30% come from foreign countries, because the new laws won’t allow recruitment of novices of foreign countries.

You can only employ skilled people from foreign countries, which means you can’t actually recruit people who haven’t had any experience in mining, which has resulted in a fall from foreign countries. We also used to have a lot of recruitment from provinces that are distant and Teba was best known for distant recruiting from the provinces of KwaZulu-Natal and particularly the Eastern Cape.

That is also reversing, according to Teba. They are now doing a lot of their recruiting in what they call host communities, the communities that host the mines. This kills two birds with one stone. If you are recruiting now close to the mines, you are getting rid of those legacies of migrant labour, which have haunted the industry for so long. They say that this is the new picture in the mining industry.

Kamwendo: Fears are rising about possible labour unrest in the gold mining industry in 2015.

Creamer: This sounds so ironic doesn't it. A low gold price, fewer people, 8% fewer a year. Natural attrition being declared. Owners saying there is a surplus of workers, yet there are fears rising about possible labour unrest in the gold mining industry next year. It is all around perception of what the gold mining workers see was gained by the platinum mining during that five-month strike.

If you analyse that five-month strike, losing five months of wages is one heck of a blow. But, the unions are playing a game where they are saying the platinum workers are now in a sweeter spot then the gold mining workers because they went on that prolonged strike. This is fuelling the atmosphere where there could be a strike. People are saying there will be a strike in gold mining early next.

We should use this as an early warning where the stakeholders should get together early, which they didn't do with platinum, and make sure that we can quell this strike by taking steps that can get rid of these perceptions, like whether or not platinum miners really earn more. So, this is important and we saw the Section 189 retrenchment notices starting to come out and Harmony Gold this week with a Section 189.

You can see that Kusasulethu mine won’t exist if they don't change their plan and lower their volumes of gold that they can produce and do so at lower cost. You have got a surplus of mineworkers, yet there is still strong talk and people will say openly, yes, that there is going to be a strike in the gold mining sector in 2015.

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

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION