Sep 07, 2012
Education|Engineering News|Mining Weekly|System|China|South Africa|Transport|Martin Creamer|Engineering News
© Reuse this
Every Friday morning, SAfm’s AMLive’s radio anchor Xolani Gwala speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Creamer: That was the news now in Johannesburg, in the throes of a global ferrochrome conference in Johannesburg. The news coming out of that is that South African ferrochrome profitability is down to zero or below. On top of the world now are China.
We were the biggest producers in the past. This is an industry that has 200 000 jobs, it contributes R42-billion to GDP. The forex that it puts into our economy is comparable with what gold puts in, but it is seriously on the decline and knocking it down are the electricity issues and also the whole infrastructure here that has been developed is now lying idle.
We are helping the Chinese, the Chinese don’t have the chrome ore of their own, 50% of that ore now comes from South Africa. This flies directly in the face of our beneficiation policy. This was an example of beneficiation; you add six-fold value to your normal chrome and you export ferrochrome, but it is an industry that people are saying the situation is worse now for ferrochrome then when it was during the global meltdown.
Present were representatives of the Department of Mineral Resources and they are saying that they are now two weeks into rescue talks. The Indians used to be the biggest suppliers of this chrome to China, but they stopped in 2006 and said that they are going to impose taxes on the export of it.
What has been asked for by the industry is that in the interim please just impose and export tax of $100 a ton. That still hasn’t happened so the talks now are progressing and hopefully something will come out of this. The government is saying that the they will look at it holistically and make sure that South Africa Incorporated wins.
There is very expensive infrastructure that has been built for about R13-billion with much of it lying idle. This is good environmentally, because it doesn’t spew carbon dioxide in the air. The furnaces that the Chinese have does just that.
They have smaller furnaces, so even environmentally there is an argument for South Africa retaining this market. Hopefully they will put their heads together and do something. There was a lot of activity going on calling for restructure of the industry in Johannesburg. I don’t see that happening, but still I think there will be some sort of rescue from government.
Gwala: There has to be, because there are jobs here and all sorts of benefits that we should have as a country.
Creamer: Marikana has got people thinking out of the box. This situation of a hundred year old culture still being developed in labour here is just not on anymore. People are saying that migrants having to live dual lives, one around the mine and they never seem to get home for long periods of time and also to going back every now and again to their home.
They say that should be looked at, because in other countries people are flown thousands of miles to back to their families every 10 to 15 days. Look at Argentina where they will fly people 2 500 km to Buenos Aires from Patagonia area. The suggestion now is let’s look at the economic feasibility of this versus the living-out allowance, which has caused such a lot of problems.
Here you have got the mines saying that they don't contribute the squatter camps around the area, but if you are giving a living-out allowance, then how do you know? Because people are going to just develop their own homes because their families are in distant areas, maybe in the Eastern Cape, or Lesotho or Mozambique, so they think, let me get the cash, I don’t mind how our live here, even though I may be suffering from TB which is going to make it worse.
So they are saying, lets relook at that because they can have mass transport arrangements, getting people back to their families at greater frequencies of 10 to 15 days. One of the protagonists of these are AngloGold Ashanti’s newly appointed social and sustainable development executive David Noko, who is also very keen on trying to bolt-on an education type school onto mines.
Like we have academic hospitals where people would go in there and do research and advance themselves, can’t we have bolt-on education in mining activities and maybe even academic mines to try and uplift this situation of employing minimally educated people.
This has probably been the biggest down-fall of the mining industry employing minimally educated people and now expecting high productivity. By appointing these minimally educated people you are building lack of productivity into the system. That has to be rethought.
A lot of comment coming up now even from Patrice Motsepe saying that you have probably got to draw the line with labour demands. A lot of these labour demands are becoming unreasonable and Motsepe, from African Rainbow Minerals, is saying that there are now times that you have got to look your labour in the eye and say we can not pay you what you want because it is totally unreasonable.
So with the movement in of less mature unions and sometimes not unions at all, these demands don’t seem to be based on any rationality and the line now is starting to be drawn and new thinking coming into the industry to take us out of that mould that we were in, that probably was a 100-year-old-culture.
Gwala: South Africa needs more oil-refining capacity, the South African Petroleum Association says.
Creamer: This is also a very critical thing. Sapia says that we need this extra capacity. We note that some of our refineries are 50 years old, ageing and not much has been done to upgrade them.
There is the new Clean Fuel 2 legislation coming in by 2017. Around all that activity people are saying what are we going to do to ensure that we are going to have security of supply of fuels. We need more capacity and the industry needs to talk to government.
Gwala: 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© Reuse this Comment Guidelines
Recent Research Reports
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 Report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
This Week's Magazine
A structured approach, wherein managers personally engage at each level of the project, is necessary to mitigate delays to the workflow on mega construction projects, says State-owned Eskom Kusile power station projects GM Abram Masango. The 4 800 MW Kusile power...
Construction of transmission lines to evacuate power from a regional hydroelectric project in East Africa, which was hanging on the balance following the withdrawal of financing by key partners, is now back on track. After six months of uncertainty, the African...
Three Memorandums of Understanding (MoUs) were signed between South African and Malaysian companies at the Malaysian High Commission in Pretoria on Friday. These MoUs are part of the indirect offsets programme South Africa is providing in return for Malaysia’s...
The South African new vehicle market may well dip to 640 000 units in 2014, says Toyota South Africa Motors (TSAM) sales and marketing senior VP Calvyn Hamman. This is the first prediction that anticipates a drop in the market. To date economists and industry bodies...
Nissan will re-enter the South African minibus taxi industry in March, when the new NV350 Impendulo goes on sale. The 16-seater has been specifically tailored to meet the terms of government’s Taxi Recapitalisation Programme, which aims to replace South Africa’s...