Jul 08, 2011
Expertise|Gold|Port|Africa|Bateman|Botswana|Building|CoAL|Diamonds|Engineering|Eskom|Export|Gas|Mining|Power|PROJECT|rail|Resources|Road|Solar|Transnet|Africa|Democratic Republic Of Congo|Contracting|Energy|Logistics|Steel|Infrastructure
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
To subscribe email email@example.com or click here
To advertise email firstname.lastname@example.org or click here
Updated 7 hours ago A survey conducted by EY show that Acciona Energy's activities in South Africa have contributed $295-million to the country's gross domestic product (GDP) and created over 9 500 jobs. The goal of the survey, entitled ‘Acciona Energy in South Africa: A business...
Recent Research Reports
Energy Roundup – May 2016 (PDF Report)
The May 2016 roundup covers activities across South Africa for April 2016 and includes details of the National Energy Regulator of South Africa’s proposal to introduce a coal benchmark cost as part of its final decision on Eskom’s multiyear price determination...
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
This Week's Magazine
Following the drop in commodity prices and China’s demand for Africa’s resources, African economies were slumping and gross domestic product growth was stagnating in most of the continent’s emerging markets, said the New Partnership for Africa’s Development, or...
The New Development Bank, a multilateral lender formerly known as the Brics Development Bank, will provide $811-million in a first round of loans for clean energy projects in four nations.
South African car and bakkie exports into Africa declined for the third year in a row in 2015, falling from 79 228 units in 2012, to 77 589 units in 2013, 60 189 units in 2014, and 41 446 units last year – this according to the Automotive Industry Export Council’s...
Networking systems multinational Cisco is training 75 people as part of a pilot project to develop specialist networking skills in South Africa, says Cisco South Africa CTO Vernon Thaver. The trainees were nominated by and selected from Cisco’s local partners and...
The threat landscape is changing, along with technologies, impacting on new fields, such as industrial infrastructure, which is becoming increasingly connected. Smart cities are also developing fast through connected devices, Web services and cloud solutions, but...