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Jul 08, 2011

08/07/2011 (On-The-Air)

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Every Friday morning, SAfm’s AMLive’s radio anchor Gillian De Gouveia speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday’s At the Coalface transcript:

De Gouveia: We see manganese is making news, tell us a bit about that and the South African link.

Creamer: This manganese is a hardy annual. We have got 80 % of the world reserves and only 15 % of the market. That is a mismatch and we are loosing out. Our opportunity loss is huge. It is all around discussing logistics, rail, which way is it going to go.

We are only exporting about 4-million tons at the moment, and we want to go to 12-million or 16-million tons. There is scope for that in the market, there is big demand for steel in which this manganese is used. There is an outlook of growing demand, so we should be doing something, but we continue to discuss the rail.

This is not getting us anywhere. Now, the debate is hotting up as to whether we should go to the deep-level Coega Port or whether we should go to Saldanha. The industry seems to favour Saldanha, Transnet, as a new voice now back with the newly reinstated Siyabonga Gama, seems to favour Coega.

So we are back to where we started and we are losing time on this. I would say that what South Africa actually needs is a good decision of which way it is going go, because the manganese story is becoming the saddest mining story that we’ve got.

We don’t really add value to it, but perhaps if we go the Coega route there could be some value addition with a ferromanganese smelter at the Coega port, but we need a heavy haul-line there. I think the Western Cape is as anxious in its new IDZ to get it at Saldanha, so the fight is on, but who is going to win it we don’t know.

De Gouveia: Moving from the sad news to what I suppose would be good news or happy news in terms of South Africa’s gold and diamond mining.

Creamer: Yes, we’ve got some fantastic expertise in gold and diamond mining and we should take it into Africa, because a lot of the times the Australians and Canadians beat us at that. But, one person who hasn’t been beaten at all is Dr Mark Bristow from Randgold Resources, which is listed on the London Stock Exchange.

We can remember well how he formed it here in the mid-90s in Selby, down the road from Johannesburg. He has built three gold mines in Africa already. He built Marula, which was a starting point and became a golden gorilla really in Mali, then in Loulo.

He went into Tongon at the height of the war and never missed a beat there. He read that political situation so well. And now, right into the Congo, he is going to build the biggest one ever. That is the Kibali mine, which is a R10-billion investment. It is going to be as big as our Blyvooruitsig mine.

We are talking about a big gold mine. That is the gold story from the South Africans. Also, South Africans are becoming very involved in this diamond mine in Sierra Leone, the Koidu expansion. Again, a billion rand project and even companies like Botes and Kennedy, a small company from the Northern Cape, involved in civil engineering and contracting.

They are up there doing work that is developed by Benny Steinmetz who has got contacts in South Africa and currently owns the Bateman group. That group also does a lot of beneficiation of diamonds in South Africa. So, again, South African involvement in Sierra Leone and also in the Democratic Republic of Congo with gold.

De Gouveia: While we are on the topic of other African countries, lets take a look at Botswana. Do you think at some point that it is going to grow into a new regional energy hub?

Creamer: You know, we associate Botswana with diamonds. That country has been too connected to diamonds and it knows it’s got to diversify. Now we see a new dawn glimmering and it is around coal and coal gas and even sun. It is fantastic to see the entrepreneurial energy that is being spent there as these young foreign investors come in, particularly from the Australian side, listed on the Australian Stock Exchange and turning the coal opportunity to account and firming up how much coal is there.

At 212-billion tons of coal there, there is a lot of energy possibility and with India now importing lower-grade coal it is opening up a new paradigm. There is some very exciting thinking from our own Exxaro, listed on the Johannesburg Stock Exchange, and they are talking about a combined base-load station that will involve solar power and it will also involve coal-gas.

So, not the coal exactly, but coal-bed-methane, where there is a lot of coal-bed-methane natural gas in Botswana. He is saying that, the protagonist of this project from Exxaro, that we could have the generation in the day of solar power and at night we could use this natural gas, which is the carbon-bed-methane, so you lower your carbon footprint dramatically and you are able to export this electricity into the region.

We know that Botswana is poised now to become, possibly in the future, a net exporter of the electricity into the region and the region needs that. If the government can get its infrastructure right and it needs that Trans Kalahari line Beira and possibly Maputo.

If you can get that plus its energy and we can see it building up its power grid there, the transmission line development is coming through plus new power stations, Botswana could become the energy jewel of the Southern African Development Community.

De Gouveia: Would or could South Africa benefit in a tangible way from this?

Creamer: Well, South Africa spurned their offerings so far. We see a lot of people that have come across just close to the border of South Africa and said we will give you energy over the fence, but it is the price at which we want to sell it that becomes a negotiating point with Eskom and, so far, Eskom has moved away from these independent power producers.

They are convinced that there will be a time that this region is going to be short of energy, is going to be crying out for that energy from them. So they are not only looking at exporting the coal, but they are also looking at power station potential. Even Sasol-type coal-to-liquids opportunities.

De Gouveia: 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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