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Feb 10, 2012

10/02/2012 (On-The-Air)

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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: Trevor Manuel used this week’s Mining Indaba in Cape Town to throw his planning commissions full weight behind delivering a better South African economy.

Creamer: That was it, to have Trevor Manuel’s face amongst all these international delegates was very important, because we know he has been very successful as a Finance Minister. Globally people know that.

Now he is leading the planning charge in South Africa and, of course, he has also come to the conclusion, which we did many times ago, that mining is the only game in town.

That is what you have to build your economy on and we’ve seen a country like Korea lift themselves up from their bootstraps. Can you imagine if they had had the metals and minerals that we’ve got, that we could actually link and build-on?

The message from Trevor Manuel to the mining community was that mining needs to be positioned as a catalyst to drive other changes in the South African economy. We need to look again at the mining sector in South Africa to be a major part of building capabilities and delivering for the common good.

This was the big theme there, because mining can create a lot of spin-offs. We know directly in the equipment side that we have already got the basis of that. So many people are making equipment for mining. If you start giving them certainty and a long horizon they can invest so much more, also in the mining services side and the technology side.

What Trevor was saying was also to link this to skills-building, education and making sure that you’ve got these research and development capabilities and put us back where we were in technology because there is such a market out there that we can sell those services to and equipment that relates to mining to.

Mining can float many boats in the South African economy that is what he was trying to communicate. In fact, we should make sure that we support that. There were also confessions, of course, the government hasn’t come forward with infrastructure and he wasn’t only talking about rail and electricity infrastructure, but water came up very strongly.

Government needs to create regulatory certainty, but he is convinced that even on the output side, the mining industry could double its output in a decade and help to nudge us towards about a 7% growth rate.

Gwala: Picking up the non-government and infrastructure, Transnet has at last cracked the code for getting coal to market from the emerging coalfields in the Waterberg.

Creamer: This has been a concern, because we’ve already got a very good power station running in the Waterberg, Matimba, which is regarded as one of the most efficient in Africa. We’ve got a second one coming up, Medupi. Exxaro, which is a black-controlled JSE-listed company, supplies all that coal and also they have been doing very well in adding value to coal there.

One of the missing elements has been getting Waterberg coal, this land-locked stranded coal, to market. There has been no rail and, of course, there has been a lot of talks with Transnet over a period of time. It is a new Transnet now and they respond with quite serious decision making these days not like in the past where you didn’t get decisions out of them.

Again, they have come forward and said they can evacuate 23-million tons of coal a year by rail from Waterberg, which changes the economics of that area. If they have also got an export element they can do so much more in the area because that sweetens the whole business plan for them.

So, they are talking about a rail time frame of 2016/17 and being able to get that coal to market. But, there is another aspect, we have got depleting coal in Mpumalanga, so from a domestic point of view the power stations in Mpumalanga will still be available for coal when there is no more coal to be supplied from the local area in Mpumalanga.

So you also need that rail to bring the coal now from emerging new coal field Waterberg in Limpopo to bring it along to Mpumalanga for domestic use as well by Eskom, so that we can keep our lights on. Also the rail going forward to Richards Bay for export.

Gwala: AngloGold is going futuristic with a new high-tech mining model. Tell us about that.

Creamer: AngloGold reiterated its stand on high-technology when it comes to mining from a public platform at the Mining Indaba. They are looking to add 30 years plus to the mines here. There are millions of ounces in the ground that will be sterilised for all time unless you get a technology solution to reach them.

Anglo is saying that they are not only saying from public platforms that they are working on a very important high-tech strategy, but they will have a prototype at their Great Noligwa gold mine on the far West Rand, where they will demonstrate this concept that they are trying to use to mine where human beings have never been before. But, to do it in a safe way to take all the people away from the danger areas and to also to get rid of that tradition of blasting.

Blasting rocks up the earth and it causes a lot of fall-of-ground problems. Use a different extracting method. We know they have called in people from throughout the world to do this. I think it is the biggest technology intervention in mining for sure, but possibly ever, to make sure that they can extract that coal, so Mother Nature doesn’t even know its coming out.

You take out the gold and only the gold, so you don’t have all that mixture of waste, which dilutes your gold. You get a higher gramage per ton, which means that these operations can be highly profitable, more profitable then they’ve ever been. Also they can be mined continuously rock around the clock, continuous mining, so that 24 hours a day you are extracting from that operation.

This is the thinking now to take the life of these mines beyond 30 years and keep them going and make sure South Africa gets back to that pre-eminent position that it has lost as a big gold producer to the likes of China, US and Australia.

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
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