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Jun 11, 2010

11/06/2010 (On-The-Air)

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

Letoaba: South Africa's State-backed electric car pioneer has unveiled a three-wheeler. Just saw some of the pictures, very interesting.

Creamer: This is linked to the Gautrain. We have had the concept of electric cars for some time. Eskom was promoting that in the 90s and the person at Eskom Carel Snyman who was doing that prototype, he has now linked up with a partner and they have introduced a three wheeler, which is an interesting concept because what he wants to do is have this electric vehicle at the various stations that the Gautrain is now going to implement. We saw the Gautrain coming in from OR Tambo to Sandton.

The next leg is the Pretoria to Johannesburg, which should be finished towards the end of 2010. So the idea is that someone in Pretoria may take their own vehicle to the Pretoria station then they will travel by train, say to Sandton, available in Sandton will be a pool of three wheeler electric vehicles.

They won't require keys or anything like that, they will use their thumb print, so it will be a personal identification. They will pay for these like you pay for your cellphone service and they will make use of these while they are in Joburg, although they live in Pretoria while they are in Joburg doing their appointments they can make use of these for their specific appointments.

If they end up in an area outside of Sandton, say they are in Rosebank, they then just add this vehicle back to the pool in Rosebank and they travel by train back to Pretoria, get into their car and go home. So, this is the sort of new thinking that is coming out the box linked to the Gautrain.

We know that the Joule, which is being developed in Cape Town is begin prototyped already and is probably going to be on the roads as we have this 2010 World Cup. That has been State-backed as well, you know you and I as tax-payers have helped to finance that through the Science and Technology grants. We see that there is this groundswell towards electric cars even from the commercial producers, all talking about producing electric cars in the future.

Letoaba: The search is on for 5 000 MW of electricity relief by 2016. Is this possible?

Creamer: You know, they have been talking about demand side management for a long time, that means getting people to use less electricity. It takes a long time to build a power station. Just look at Medupi in Limpopo, it started construction in 2007, the first electricity to come out of the first unit of that is only going to be in 2012.

Then it will be finally completed at the end of 2015 and it costs an arm and a leg, R125-billion for that. What they are saying is that we can build a virtual power station, not a real one, but a virtual one, by managing demand. The target now is to try and manage demand down by 5 000 MW, so you use 5 000 MW less.

South Africans have been talking about this for a long time, but finally a draft is going to be out at the end of this month that will crystallise all these ideas that have been coming in and formalise them into a plan so that it can be worked.

We can see they are looking at further incentives for people using solar geysers, further incentives for efficient lighting, but going right through a whole spectrum of activities even trying to shift the demand peaks and manage demand peaks in order to cut down on that electricity.

Then, on the other supply side, encouraging own generation. We saw a mine down in the Free State already wanting to generate its own electricity for own use and municipalities also becoming more involved in power generation.

The whole idea of independent power producers, as well, coming through five different supply side actions, but a lot of demand side actions, so that we reduce our use and consumption of electricity by 5 000 MW, which is effectively building another power station at a much lower cost in a quicker time.

Letoaba: Now, of course, this is one that we have been talking about on AMLive as well, Aurora the much-anticipated Chinese bid is now in to wrest two South African gold mines away from the financially troubled Aurora. Tell us more about this.

Creamer: You know we have had a lot of trouble with these goldmines, Grootvlei and Orkney. The only part of Pamodzi Gold, which was liquidated that has come out well is President Steyn and that was because it was bought by a well-known gold miner Harmony Gold, that knows how to deal with gold mining and knows how to carry this on.

We must realise that we are dealing here with national patrimony, the actual mining licences issued by the State. The State is the custodian. So, we need to look after these precious mines, even though these are marginal mines. We have had a lot of trouble with these.

We saw Aurora Empowerment Systems coming in and they had big high profile names like the Zumas and the Mandelas were in there in a big way. They were backed by a Malaysian funder who didn't come to the party. Now, all of a sudden they are underfunded.

They have got an alternative funder now which is a Swiss funder coming in with R700-million, but only if they can list on the Stock Exchange will those funds be triggered. So, they are accelerating their plan to get on the exchange, the liquidators are happy with the time cycle, but now coming in to steal it away from them, even though we have got these big names there, it hasn't sort of inhibited the Chinese from coming in with a local partner.

The name is Virgile Asian Mining Consortium and they are linked also to the Hong Kong listed Grand TG Gold. They have now put in a bid, which is not a very high price, it is $51,5-million for the assets. Two of these assets which is Grootvlei, which has got a lot of problems.

It not only has water problems, but it is hedged which means its sold its gold forward at a low price. Orkney is also not operating at the moment, so they are buying very stressed assets, but one would have thought they would have offered a little bit more. It is $51,5-million, but the big thing is not so much the price that they offer now, but what money are they going to inject into that.

That is going to be the important thing, because we see people haven't been paid and there is a lot of union unhappiness. People also threatening to walk off the job at the moment and those are key people who see to the water situation.

They are like little Dutch boy with a finger in the Dyke, if they pull that finger out we can have a lot of trouble, so this needs to be sorted out. Maybe such an issue should go be beyond the liquidators, the liquidators now faced with another bid, it creates a lot of confusion.

Perhaps we need a Parliamentary Portfolio Committee to sit down and to listen what are people going to do with this mines, because after all this is national patrimony, there is a lot of jobs and hardship and hurt involved. So one hopes that they can sort this problem out with the Orkney and Grootvlei mines in the hands currently of Aurora, but wanting to take that away now are the Chinese.

Letoaba: 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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