Deteriorating outlook for mined exports putting vital foreign exchange earnings at risk

21st February 2014 By: Martin Creamer - Creamer Media Editor

Deteriorating outlook for mined exports putting vital foreign exchange earnings at risk

Mining strikes reduce the foreign exchange earnings that South Africa needs to buy things from other countries.

Destroy mined exports and you destroy South Africa, was that missive that President Jacob Zuma sent out last week.

He regarded the message as being so important that he departed from his written State of the Nation address to deliver it.

The President made it clear that it was incumbent on him to disallow a relatively small number of strikers from smashing the economy that 50-million South Africans feed on.

Zuma was correct to give notice that he would be duty-bound to prevent the catastrophe that a badly damaged mining sector would cause.

But in truth, an independent analysis may well find that the risks mineworkers face as they go down into the world’s deepest, darkest and most dangerous mines every working day do perhaps outweigh their pay demands.

But it is also true that such sharp pay increases at the level demanded would probably deal a potentially lethal blow to precious metals mining as we know it.

A dispassionate view may be that neither the mining companies nor the mineworkers are to blame and a growing view is that the latest wave of mineworker strikes exposes that the modus operandi of South Africa’s hard-rock, narrow-reef mining sector has past its sell-by date.

As people shake the dust off research done 30 and 40 years ago, they are astounded that reform failed to happen for so long.

For example, the automated raise-boring method that AngloGold Ashanti is now fast-tracking had its genesis as long ago as 1974.

No-brainers like selected mine blasting (SMB) have been around for decades. (See also pages 8 and 9 of this edition of Mining Weekly.)

AngloGold’s so-called new South African technology is now even being put through its paces in some platinum mines and tried-and-tested mechanised equipment is being belatedly combined with SMB to work new narrow-reef wonders.

Mechanisation and even automation has taken hold in the mining industry the world over and the only laggards have been the companies mining in the narrow reefs of South Africa’s hard-rock precious metals mines.

The time is now ripe to break from the expired business plan of South Africa’s strike-hit hard-rock, narrow-reef precious metals mines that are under the cosh and to remake a new era of machine- mediated productivity and safety.