R/€ = 14.94Change: 0.05
R/$ = 14.04Change: 0.05
Au 1075.40 $/ozChange: -0.66
Pt 842.50 $/ozChange: 0.00
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Mar 09, 2012

09/03/2012 (On-The-Air)

Engineering|New York|Africa|Aviation|Engineering News|Export|India|Mining|Mining Weekly|Platinum|System|Technology|Africa|Australia|Chile|China|South Africa|United States|Zimbabwe|Normal Car|Merensky Reef|Martin Creamer|Micheal Solomon|Massachusetts|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:

Gwala: The world’s first flying car is to go on display in New York next month.

Creamer: We have been talking about Terrafugia now for some time and now they are actually going to display this car, which can go from car to plane in 30 seconds.

The situation is that you would have to have a pilot’s licence and a driver’s licence, but they have negotiated with the highway authorities and the aviation authorities and they have got the thumbs up on both sides. Once you come down and land at the airport, you fold up your wings and you drive home.

The width of this vehicle is about 2,3 metres if you haven’t got your wings out as a normal car, and about 8 metres when you give it wings. Interestingly it uses unleaded fuel, it doesn’t need the aviation fuel. It is simply something that looks like very futuristic at the moment.

One would think that it needed many more years of discovery. But the Massachusetts Institute of Technology team that has developed this, through Terrafugia, has now got to the stage where it is usable.

Gwala: It is amazing.

Creamer: The price is going to be about R2-million, so that could be a bit of a problem, but they are taking deposits at about R80 000.

Gwala: I can’t imagine this. You go to the airport and you use your own car, you don't have to worry about SAA or the other airlines.

Creamer: They will be at the New York International Autoshow, which begins in 28 days.

Gwala: South Africa’s once-booming ferrochrome industry, which employs 200 000 people, is suddenly under serious threat from China. What is the issue here?

Creamer: We have had a fantastic ferrochrome business where we add value to chrome. This has always been a beneficiated industry.

We know that the government is coming in now with beneficiation policies, but this has been going on for many years. What is happening now, is that platinum miners in particular are going for UG2 Reef, which is a different reef to the Merensky Reef. In that reef is also chrome, so they are ending up with streams of chrome faster then they expected.

They are looking for markets for these, so China, which doesn’t have any of its own chrome, is taking our chrome. China’s production is on the ascendancy, the 300 000 tons which we were down in South Africa in the ferrochrome business last year, that was the exact ascendancy in China.

They are getting half of their chrome now from South Africa. India, which was right next door to China, was initially the biggest supplier of unbeneficated raw-chrome to China, but the Indian government stepped in and they also want to add value at home with the beneficiation process. They have intervened and put taxes on the export of the chrome from India.

So, our South Africa government is thinking of doing the same, brining in as a temporary measure and intervention and export tax just to make that production in China a little bit more expensive. In the longer term they want to have a different quota system where people can earn credits by supplying their chrome into the local South African market so the value can be added here.

It is going to be part of the whole beneficiation strategy that there are ten commodities with about five supply chain areas that are going to be beneficiated and one if them is this chrome area.

They are looking before the end of the year and I think it should come sooner then that for some sort of tax to be imposes to make it less beneficial for China to get this chrome and also to then go into a longer term strategy where we can not only keep this big employment level of 200 000 people and contributing about R42-billion a year to the GDP. But, there is also a potential to grow it, we host most of the world’s chrome reserves between ourselves and Zimbabwe.

Zimbabwe has already imposed a ban on their export of chrome, so that is an even stronger measure. We haven’t really resorted to that which wouldn't really work with our World Trade Organisation membership, but temporarily bringing in taxes is accepted and this is what is going to be done.

Gwala: Resource rent. That’s the name of the new tax game confronting South Africa’s mining industry.

Creamer: Resource rents tax, those three words are on the lips of everybody in mining at the moment because of the latest document that has come through. The ANC document, the State Intervention Mining Study that has been done. It recommends that South Africa moves into a situation of resource rents.

Once the private sector companies get a good internal rate of return, and they are mentioning about 22%, that if you get this internal rate of return and you are still earning profits above that, the government is looking for a post-profit participation at a rate of 50% in terms of this study.

Of course, this is still a study it hasn't gone before the government yet, it is just an ANC document which came against the background of looking into mine nationalisation. We had those calls for mine nationalisation, so they have come in with this.

The initial studies and one of the leaders in our mining industry Micheal Solomon, who was the former Wesizwe platinum CEO and is now with the J&J Group. He thought he would do an experiment and he took a South African deposit.

Theoretically he then added the resource rents to it. He then took this deposit and planted it in Australia, US and Chile to see how competitive we would be. With the resource rents, unfortunately South Africa becomes uncompetive.

Even with our royalties we can see that we are fairly evenly balanced competitively with the rest of the world, but the moment you bring in these resource rents, in fact, if you put that theoretical deposit in Australia the Australians would be R500 000 ahead of us. So it would be a no brainer if someone had an opportunity to mine in Australia or South Africa they would go for Australia. I think it needs to be carefully worked out because the intention of the document is to look after future generations with these rents. In other words, you take this money and you put it in a sovereign wealth fund, offshore.

Once these metals and minerals are taken out of the ground our future generations aren’t going to benefit from this, but if we take some cash now and we put it in that sovereign fund, future generations will benefit. But, people are saying that perhaps they can use the royalty money for that.

This document does want to cut down on royalties bringing them down to 1% so maybe there is a balance somewhere along the way here, but in the meantime it seems that these resource rent taxes will make South Africa uncompetitive against the rest of the world.

Gwala: Suddenly it is an ongoing discussion, there is a lot to come out of this one. 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 (150 word limit)
Other SAFM
Latest News
Maurice Radebe
Updated 7 hours ago Imported liquefied natural gas (LNG) is expected to initiate the greater use of gas in South Africa’s currently coal-dominated electricity generation. Anticipated is the establishment of infrastructure at South African ports, such as Saldanha Bay, Coega or Richards...
Updated 7 hours ago As South Africa battles water restrictions precipitated by the El Niño phenomenon, aged infrastructure, above-average temperatures, below-average rainfall and climate change, industry stakeholders have called for a collaborative water stewardship approach that will...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 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 infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
Additive manufacturing, better known as 3D printing, has the potential to completely change the relationships between individual consumers, professional designers and manufacturers. So argued Loughborough University Reader in Computer Aided Product Design Dr Ian...
Airbus Defence and Space: Military Aircraft has highlighted that its A330 Multirole Tanker Transport (MRTT) has significant commonalities with the Airbus A330-200 commercial airliner, upon which it is based. The South African Air Force (SAAF) once operated a fleet of...
Financial services provider Nedbank launched the second edition of its Carbon Footprinting Guide earlier this month, which is aimed at demystifying carbon footprint approaches and help readers grasp the main concepts of carbon measuring, monitoring, reporting and...
This year marks the thirtieth anniversary of Caterpillar’s first backhoe loader. This also coincides with the worldwide release of its latest-generation F2 series backhoe loader, which was launched at supply chain services company Barloworld Logistics’ Big Dig Day in...
BARRY DWOLATZKY The CPD programme provides advanced skills required locally, and provides a stepping stone to Wits University’s Master of Engineering degree in software engineering
A shortage of software engineers is leading to fewer information technology (IT) projects in private and public sector organisations. This also places a dampener on the economy, as IT is an integral part of business and civil service, says University of Witwatersrand...
Alert Close
Embed Code Close
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96