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On-The-Air (27/06/2014)

27th June 2014

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: American giant GE plans to recruit 100 engineers and technicians for its new innovation centre in Gauteng.

Creamer: This is fantastic, a big US multinational deciding to really put its money where its mouth is in South Africa at a time when a lot of investors are not to happy about our investment climate. Here they are going to plough R700-million into this new innovation centre, as well as skills development and small business development incubator.

It is a fantastic thing for South Africa because what they are saying is that we should have in-country innovation and it should not just be about imported product. It is all against the background of the government spending a fortune, R800-billion, on new infrastructure. Of course, infrastructure involves transport infrastructure including rail infrastructure.

GE is right there with those locos that they build. They are saying that they want 100 engineers from South Africa, which we will set up in Gauteng, engineers and technicians and they can then do this in-country innovation to tailor make everything for the clients here in Africa. It is a starting point for Africa because you see GE is also building locos for Mozambique, so people are looking long.

That is R500-million going into the innovation centre, but then R200-million going into small business development and skills development and, of course, the new small business Minister Lindiwe Zulu was over the moon with this. She was saying we should start a new toyi-toyi. It shouldn’t be a destructive toyi-toyi anymore we should start toyi-toying for a growing economy, for small business.

It was a great vibe that they set-up there to set a new benchmark for us here where we innovate for ourselves but with the help of big multinationals. Then we set-up small business also with the help of big multinationals who are prepared to give you that business. They are saying we need this, you make it and give it to us and we guarantee you that we will take it, but you can also make it for everyone else. This helps us set off small business.

Kamwendo: A new bright light is about to be shone in the dark corners of platinum pricing and the gold price fixing.

Creamer: Even with the platinum strike going on for five months it didn’t really impact on the price of platinum. We saw it go up slightly, 5%, although 40% of the supply was away and its supposed to be supply and demand orientated. People are starting to look at this pricing. South Africans need to know more about it.

We are miners here and we get stuck in the dark underground and we don't realise what is happening on the surface with the pricing. We know that with the gold price fixing in London, a lot of scrutiny is going into that at the moment, because we saw a fine being imposed on one of the banks. It was proved that they deliberately pushed the gold price down to suit themselves. So this is manipulation at the highest level. Now, we have the east that is really becoming big in precious metals.

The east is now the big gold bug. They are the ones that are producing most of the gold and so they are also consuming most of the gold and they are saying that we must be more involved in the gold. So, Singapore has this kilobar contract, which they launched this week against the background that there will be new transparency and openness in pricing and new price discovery.

We see the Singapore government giving special tax concessions and a big refinery opening there this week. I think the centre of gravity on this pricing is going to start moving to the east starting with gold, where we will have a far better handle on how this gold price is arrived at rather then the fix in London, which arrives after Asia has already gone off the boil, its closed its business hours. They are now saying we want these prices to be done during our business time, openly and transparently, in a modern 21st century way.

Not like the London fix that has been going on for a century. In London you have four banks phone each other and arrive at a price. I think that a new era has developed in terms of pricing, more openness, more transparency and the South Africans should be watching this carefully because we are so dependent on it.

Kamwendo: South Africa needs to create a new beginning for its struggling mining industry after the worst strike in living memory.

Creamer: Certainly, we really need a new beginning because we saw that five months stand there and labour saying this is what we are going to be priced at. Of course, labour has priced itself out of the market at the moment. So, what do you do? You have got to start with a new beginning.

Firstly, looking at that migrant labour situation that has just got to change, they have got to phase that out. You have seen the moral bankruptcy of the migrant labour system going on for more then 100 years. We have got to change that system. Then we have seen the financial bankruptcy of the way we mine.

We have got to mine differently and we can not have this labour intensity because it has priced itself out of the market. So we have got to mediate that labour with new technology. We have got to train them up and think out of the box now, because you have a situation where you used to have academic hospitals for instance where doctors are training.

They would have an opportunity to go through their paces in academic hospitals. We now need academic mines, we need that concept and we need to bolt on the education and see that we enter a new era facilitated with technology that is available everywhere in the world.

We need to apply it. It has even started to be applied and it is working new technology that is working very well. We need to emphasise that and phase out the labour intensity and go into this new era. A new beginning and think out of the box.

Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back with us at the same next week.

 

Edited by Creamer Media Reporter

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