On-The-Air (06/02/2015)

6th February 2015

By: Martin Creamer

Creamer Media Editor


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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: Job-saving gold-mining talks are paying off as win-win solutions are found for employers and employees.

Creamer: We can see that these job-saving talks through Section 182 are worthwhile because Sibanye is the first to report and they have saved 213 jobs, which means that there is still going to be 1 700 job opportunities there.

Shareholders should be happy, because they have got 22 more shifts as part of this deal. Projected profits will be up by R50-million a year. So, it seems the way to go about things is for employees and their workers to really talk it out.

We have always had the problem of fewer shifts in South Africa than in the rest of the world. Perhaps this is a way of workers realising that they can preserve a lot of their jobs through increasing some of the shifts.

Mineral Resources Minister Ngoako Ramatlhodi also referred to it this week in Cape Town, when he spoke at the IHS Energy South African Coal Exports Conference 2015, saying that, perhaps increased shifts are going to do the job. Now we are going to look and see what happens at Harmony, where there are about 3 000 jobs at risk there. They are also talking at Kusasalethu through this very legislative framework that we have got. Further, AngloGold Ashanti wants to take seven operations into three to see whether they too can save some jobs. We see that perhaps that fear from the National Union of Mineworkers­ ­­– about a jobs blood bath – may be avoided.

Kamwendo: A Ministerial coal task team has been set up in the wake of South Africa losing R23-billion owing to lower coal prices.

Creamer: Ramathlodi’s address actually went down very well at the Coal Exports Conference – he seemed very open and apostolic. He was taking questions and continued to take questions until the questions got a bit tired. His response was quite positive.

However, he said that he has now formed a coal task team and he wants to be a “hands-on” Minister, so that he sees exactly what goes on with various commodities. We have had an overall task team, involving government, business and labour. But he is now talking about being commodity-specific and saying that all coal is exceedingly important, because a couple of years ago this earned more foreign exchange for us than any other commodity.

Now, we always think gold and platinum are the precious commodities bringing in the most foreign exchange, but coal is extremely important. However, because the coal price is down, we have brought in less foreign exchange – R23-billion down on the coal just because of the price.

The fear at this Coal Conference is that the price is not going to go up fast. We saw it go to an all-time low this month of $53/t. That is 60% below 2011’s price, when we had more wholesome days with coal.

Unless something drastic happens, industry stakeholders think that we will possibly never touch that $100/t price again.  Therefore, we have to look into other activities and the Minister was outlining how we should use technology to get productivity up and to engage. He also spoke about additional shifts being worked in order to come up to speed with the rest of the world when it comes to mining – the important activity we have in South Africa

Kamwendo: The Japanese may have found a way to unlock South Africa’s dormant Springbok Flats coalfield.

Creamer: The Springbok Flats straddle three provinces, namely Limpopo, Gauteng and North West province. This has been a problem child for geologists for a long time because the coal is mixed up with uranium and you need some way of unlocking that contamination.

The word at the Coal Conference – and it came from XMP consulting geologist Gerhard Esterhuizen – is that the Japanese are now claiming that they are able to unlock this. I can remember reading the paper in the 70s. They were saying “Wow, we’ve got these Springbok Flats, we’ve got the coal, we’re going to put a Sasol-type operation there.”

That was the old Gencore, which is now BHP Billiton, but nothing could come of this, because of the contamination of the uranium.

We also see the former DG of Public Enterprises Dr Sivi Gounden has been there for a few years, also trying to create this sort of uranium power plant to get away from the problem of the mixture of uranium and coal there. If it is true that the Japanese have come though with some sort of an answer, it could be very important for South Africa to unlock more coal. 

We know how important this is. The Minister was saying we need a balance; we must let people export and make money. We also realise that Eskom needs a lot of this coal.

Eskom’s plea at the Coal Conference was for coal miners to let their good coal go out and to give Eskom the leftovers, but to also ensure it supplied at leftover prices and not at a high prices.

Eskom complained about 20% price increases and that it is not allowed to charge more for electricity, because it is regulated by Nersa. However, the coal miners are allowed to charge what they like for the coal, and there is no cap. So Eskom was looking for a balance ,with the Minister right in the middle trying to sort the situation out.

Kamwendo: Are you off to the Mining Indaba in Cape Town next week?

Creamer: Yes. Seven thousand people will be there from all over the world with a lot of peripheral activities as well. You can see it building up this week and the taxi drivers and everybody getting ready for this crowd coming down. It seems as though it will be a very big one, despite the current downturn in the mining sector. 

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


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