May 13, 2011
Engineering|Gold|Johannesburg|London|Rustenburg|Africa|Ecsa|Education|Energy|Engineering News|Lonmin|Mining Weekly|Platinum|Royal Bank Of Canada|System|Africa|Australia|Brazil|Saudi Arabia|South Africa|USD|Marikana Mine|Energy|Healthcare|Mining|Phthisis|Silicosis|Ecsa|Gillian De Gouveia|Mark Cutifani|Martin Creamer|Engineering News
© Reuse this
De Gouveia: The South African gold-mining industry is being shaken by the claims of silicosis sufferers. Tell us a bit more about that and the possible effects.
Creamer: Some of the numbers that have been bandied about, about what claims could total against the South African mining industry have been quite startling. In fact, some of the analysts in London have put a figure of US$100-billion, which is like three times more then the market capitalisation of our biggest gold miners.
I think that they are talking in numbers like that, because this silicosis scourge, we used to call it phthisis in the old days, but silicosis is so widespread in the mining industry and it’s a legacy issue as well as a current issue.
You can imagine if there are, and they estimate like 300 000 suffers, if those people come forward and claim it could be exceeding onerous on the South African mining industry.
What has happened is that the Constitutional Court, the highest court in the land, has opened the door for this. We do have two statutory levels where statutorily you could claim and the two levels one was more generous then the other.
The mining industry, I think, unfortunately at their peril, chose the less generous option in terms of compensation, whereas the ConCourt is now saying you should have possibly chosen the more generous option. In the meantime, they’ve opened the door and said sufferers from silicosis are now able to impose a civil lawsuit against the mining companies.
So, the mining companies now rushing out and saying that they should get this compensation in order, let them go to the more favourable compensation, but let us sort it out very quickly. You can see the reaction of investors, where investors are starting to get a bit shaky over this issue of silicosis.
Analysts in London have really laid it on thick and saying that it must be taken seriously. We noted that Anglo American in their introductory remarks at their AGM, their Chairman and their CEO immediately referred to the silicosis issue and they have offered to pay for healthcare for people up until this case is decided. There is still a long way to go with actually the merits of the case, so we will have to watch this space.
De Gouveia: What about people that already passed away as a result of silicosis? Would their family members be able to claim as well?
Creamer: This is an issue that the National Union of Mineworkers raised. They are starting a bit of crusade getting a register going on the number of people that are suffering from it and they also mentioned that people who have died will also be on this list. So it could be a pretty extensive list.
De Gouveia: I suppose one of the key issues there would be how far back they would actually go?
Creamer: Exactly, because it goes way back, 130 years.
De Gouveia: If we are looking at an amount, what did you say US$300-billion that could potentially wipe out the gold mining industry, do you think?
Creamer: Well, we are talking about the number that was bandied up and has been heavily criticised by AngloGold Ashanti’s Mark Cutifani, the number that they calculated based on the claim of one of the individuals of R2-million. If you extrapolate that over 300 000 people, they are calculating, these analysts from the Royal Bank of Canada in London that this could be a damage of US$100-billion, which would be enormous.
De Gouveia: Well, we are done with the bad news, moving on to some potentially good news with respect to platinum. Tell us a bit about that.
Creamer: We have got three big platinum mining companies and the smallest of these Lonmin has sort of given a lead in how much its going to spend over the next five years and they are looking at R13-billion worth of expenditure. This is going to be good for the Rustenburg area, concentrated around Marikana mine, and again focussing on platinum.
We have had criticism from various think tanks saying perhaps that we are under producing with platinum, we are also behind, undersupplying and that could be dangerous in the long-term. If platinum is going to play this big energy role that people think, that the fuel-cell will be the engine that drives our cars, then perhaps we are under-capitalising here and allowing the price to go a bit too high.
If the price does spike, people look for alternatives. They are saying protect the industry and produce at a level that comes close to meeting demand. So, we see that Lonmin now listed in London and Johannesburg, said they will be spending R13-billion on expanding their Marikana mine, mainly over the next five years.
De Gouveia: Now if platinum producers can meet the demand, what sort of spin-offs are looking at for South Africa?
Creamer: You know, I think that if platinum does play the role that some people expect it will in the future, what Saudi Arabia is to crude-oil, South Africa could be to the future new-age energy. So, I think there is reward.
De Gouveia: A new push is under way to make engineering attractive to South African youth.
Creamer: That’s right. The Engineering Council of South Africa (ECSA) has taken cognisance to the fact that we need a lot more engineers to come into the system and they’ve launched this ‘engenious’ programme.
Of course, this does come against the background of the government wanting to spend R215-million on education and training and also looking to try to get 30 000 more engineers by 2014, which people say is a pretty tall order.
I mean if you look at ECSA now, that is the statutory body, its register says that we have got 35 000 engineers. Now, not all engineers are registered, because it’s not mandatory to register. That is the sort of level we are looking at of about 35 000, less then 3 000 of them women.
So, they are trying to get more activity from women in the industry and at the same time get youth interested, get this put on the table, get this into the schools, they are getting a website listed, they are doing a lot of brochures, they are going outreaching to the schools. One of the areas of great concern is municipal engineering, with the municipal elections coming up this is really one of the Achilles’ Heel of the engineering equation.
There was an attempt to try and get retired engineers to twin with young graduates and youth and this has helped at the municipal level, but certainly still inadequate. We look at the global numbers and we are way behind. We have got about one engineer for every 3 000-plus people. Brazil has got one engineer for every 200-plus people.
So, we are like 13 times behind. Australia has similar numbers. We are falling behind on the engineering front and our service demands are growing as accentuated by our elections next week.
De Gouveia: Why do you think it is that we have such a shortage of engineers in the country?
Creamer: This is a maths and science issue as well, so the teaching starts at a very early stage and one has to look at the whole education system and see that maths and science are key.
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© Reuse this Comment Guidelines (150 word limit)
Recent Research Reports
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.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
A stormwater project in Bedforview, east of Johannesburg, has stalled for eight months after project managers in the Ekurhuleni municipality resigned and municipal managers were placed on special leave without designating replacements. Construction to reinforce the...
The design of the Beit Bridge border post is the biggest impediment to efficient freight movement between Zimbabwe and South Africa, says Cross-border Road Transport Agency CEO Sipho Khumalo. Beit Bridge is the busiest border post in Africa. A research study on the...