Dec 10, 2010
Engineering|Port|Africa|CoAL|Engineering News|Eskom|Genorah Resources|Industrial|Industrial Development Corporation|Mineral Resources|Mining Weekly|Platinum|Renewable Energy|Renewable-Energy|Resources|Africa|Australia|South Africa|High Court|Energy|Mining|Product|Wind Energy|Florence Letoaba|Martin Creamer|Power|Susan Shabangu|Engineering News|East Africa
© Reuse this
Letoaba: A new Constitutional Court ruling gives special new status to South Africa’s near-mine communities. How will these communities be benefitted?
Creamer: What the court decided and it was the Constitutional Court, the highest court in the land, and it over ruled a lot of other court rulings, is that people come and prospect on the land of communities, but they do not necessarily consult properly with those communities.
So what the court did is that it actually withdrew the rights from the prospecting body, which was Genorah Resources and said to the government that they must go issue those rights again, because the way you issued them now did not have a consultation process that was proper with the near-mine community.
Of course, the Bengwenyama community are very happy about all this, because they went through the High Court, the South African Court of Appeal and then finally to the Constitutional Court and all their costs have been paid. So it was quite a resounding victory, which has set the cat among the pigeons.
We had an Australian-listed company that suspended trading in its shares. The company was Nkwe, because they are linked to Genorah, which is their BEE partner.
A lot of consternation in the industry and not the least at the Department of Mineral Resources, because the head of the department is saying now that how do they define consultation and this needs to be written into our legislation, which the Minister of Mineral Resources Susan Shabangu is re-writing it and overhauling it completely. By the middle of next year we should have new legislation.
But, we see now with special rights going to the community. This could have consequences, because we know that there has been a lot of acrimony with the community.
Only this time last year we saw on the western limb at Wesizwe, the Bakubung split in two and people took some of their shares that were in this platinum company and they turned them into cash, they collateralised them and that upset the rest of the community and now there is a huge court case going on.
So, although South Africans are used to private ownership they are not used to collective ownership and I think a lot of study has got to be done on this as to how do you own things collectively.
Obviously the Bafokeng are the model and they have got 300 000 people as part of them. But, even they are experiencing problems now where certain parts of communities that should be regarded as Bafokeng in terms of the Bafokeng are now saying that they want these farms and 50 farms are being claimed by the community.
So it could have a bad impact on South Africa’s wealth creation and also job distribution.
Letoaba: Despite the strident calls for beneficiation, South Africa’s raw-material exports soared to new heights in the first half of this year. Tell us about this.
Creamer: We’ve had these calls for beneficiation, in fact, the whole of Africa is saying that we have got to add value to our metals and minerals. We don’t want to just export them in raw form and we don’t want to export them in semi-form that hasn’t been properly beneficiated.
Despite this, we see now in the first six months of this year the raw-material exports and intermediate-exports, virtually primary exports, that grew in value and volume. It is indicating that South Africa is not able to do this, its far more difficult then people imagine and perhaps there also isn’t a will to do it, because we are used to just mining and sending these goods out.
I mean a lot of countries, like Australia, say to you, look, just dig the hole, get the metals and minerals out, put it on a train get to a port and export it. That is the business, but South Africa is saying, no we have got an unemployment situation, we have got to do it differently, we have got to add value here.
A lot of people see hope in regionalising, that they feel could set this beneficiation off and get our value chain going. The figures that were presented by the State-owned Industrial Development Corporation as part of a 53-page study, and in that they are advocating the Southern Africa Developing Community (SADC) and Comesa, which is East Africa, joining together into a sort of free trade area.
That will involve 568-million people, which virtually represents 57 % of Africa’s population and gross-domestic product of about $625-billion a year. So, they feel that if we link up in that way, there will be a far better chance to get our value chain going and to add value at home to these very important metals and minerals that we export now in raw and unbeneficiated form.
Letoaba: No less that 380 entities are keen to plough money into creating renewable energy capacity in South Africa. Are we likely to see that money pouring in soon enough?
Creamer: This is a new technology so it is going take its time. The very fact that the Department of Energy called for a request for information, which is called and RFI, and they got a fantastic response of 384 different entities coming in and saying that they can supply renewable energy like wind energy, solar energy and all the other forms of renewable energy.
It is an indication that this is a new area because they are working out the feed-in tariffs, what they call refit tariffs, because all these people who generate this energy have got to get revenue stream. They have got to get money and how much are they going to get?
That is what the feed-in tariff is all about. At this refit tariff at this level you can see there is an appetite from more then 300 participants that are keen to get involved. Of the 300, a third are offering wind-power, but that capacity that was offered totalled about 20 000 MW and 4 000 for co-generation, about 70 % of what was offered was wind, so it was overwhelmingly in favour of wind energy, although we know that we have got a lot of sun here.
Another third of the applicants were for the various forms of solar like concentrated solar, photovoltaic solar. We see that overwhelmingly wind is the offering, but only about 30 of these the Department of Energy says really like firm at this stage and that could be converted into actual power coming into the grid and that Eskom will have their power purchase agreement in place.
A good stride forward, but also possibly helping to achieve our target in South Africa of 7 200 MW of electricity generation from renewable sources by 2030. That will represent about 16% of the total. Some say with this sort of response, we should do better than that by 2030, and we should be getting more from renewable energy than the 16% we were targeting.
Letoaba: Martin Creamer is publishing editor of Engineering News and Mining Weekly. Martin will be taking his usual seasonal break and he’ll be back At The Coal-Face with renewed vigour on January 14 next year.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Updated 2 hours 32 minutes ago The retail price of 95-grade petrol in South Africa will drop by 45 cents or 3.3 percent a liter from next Wednesday, while wholesale diesel will decrease by 4.9 percent, the government said on Friday. Petrol will cost 13.16 rand ($1.20) a liter while the wholesale...
Updated 2 hours 47 minutes ago Special purpose vehicle GreenCape will, by the end of 2014, make an application to the Department of Trade and Industry (DTI), the Western Cape provincial government and the City of Cape Town to declare Atlantis, on the Western seaboard, a special economic zone...
Updated 3 hours ago The German government has committed a further R70-million towards the second phase of the Non-Motorised Transport (NMT) programme. The NMT programme forms part of the Department of Environmental Affairs’ 2010 FIFA World Cup National Greening Legacy Programme.
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 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 network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
This Week's Magazine
In the next 20 years, it was expected that, in Africa, more people would live in cities and towns than in rural areas, United Nations Habitat executive director Dr Aisa Kirabo Kacyira said at the Human Settlements Indaba that took place earlier this month in...
Tough-talking Human Settlements Minister Lindiwe Sisulu has committed government to building 1.5-million low-cost houses over the next five years, telling the Human Settlements Indaba in Johannesburg on Wednesday that the State would achieve this target through the...
Over the past 20 years there has been persistent concern about deindustrialisation in South Africa, as well as the fact that locally produced manufactured products have been increasingly displaced by imports.
Financial agreement for Ghanian independent power producer (IPP) Cenpower Generation Company’s $900-million, 350 MW combined-cycle gas-turbine power plant was finalised earlier this month, paving the way for the project’s construction to begin before 2015 in Tema,...
The revenue implications for South Africa of ‘base erosion and profit shifting’ by corporate taxpayers are firmly in the crosshairs of the Davis Tax Committee (DTC) and Judge Dennis Davis hinted last week that recommendations were being considered to “detect and...