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Mar 18, 2011

18/03/2011 (On-The-Air)

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

Molebatsi: Investors are planning to plough R4-billion into a new coal mine in the impoverished Limpopo.

Creamer: Again, it’s coking coal that they are looking at and again it’s the same company that did Vele and was stopped. That is the company that is listed in London, Sydney and also listed in Johannesburg and it is Coal of Africa (CoAL). They’ve still got the appetite to go ahead.

This time they are looking at the Makhado mine, which will take an investment of between $500-million to $600-million, so we are looking at well between R3,5-billion to R4-billion. That is for coking coal in an area that really needs some wealth creation and needs jobs. We see what’s happened to Queensland in Australia where it is underpinned by coking coal. That really is a very strongly founded province financially.

Limpopo can really do with this. We saw with Vele that the government actually stopped CoAL’s previous mine. It is still stopped and they are actually hoping to let it go ahead, but in the meantime the company has brought in Unesco and it showed them that they can rehabilitate while they mine and that there can be a win-win situation.

So they are still confident of that. One looks to areas where mining has been stopped, like I went to Richards Bay Minerals the other day and saw how well they rehabilitate there. There is modern rehabilitation techniques, they bring back the biodiversity to a fantastic extent.

Molebatsi: Sometimes even a better condition.

Creamer: Yes, its sometimes better. We saw them stopped in St Lucia and that St Lucia area is still not mined. They were stopped by environmentalists who said ‘no we will bring ecotourism’, but there is still no ecotourism. So it’s a lose-lose, rather have a win-win situation, especially with coking coal the hard coking coal fetches more then double the price of normal energy coal.

Molebatsi: How soon will that project come on for Makhado?

Creamer: Well, they are looking to getting a go ahead in early January 2012 and then starting to mine 18 months later, which will be mid-2013.

Molebatsi: London investors have approved a multi-billion rand capital expenditure on Southern African diamond projects, one a brand new mine.

Creamer: Again, a moderately sized company, Gem Diamonds, listed in London and run by Clifford Elphick. He knows the scene because he worked for the late, great Harry Oppenheimer and was close to De Beers. He now formed his own operation Gem Diamonds.

They are coming in with R2,3-billion worth of growth investments in diamonds now. We can see diamonds recovering and it is in Southern Africa, not quite South Africa. There is a brand new mine, Gope in Botswana, which is going to start.

There is also sensitivity around the National Park, they won’t have an opencast-mine, they will go underground to deal with that sensitivity and work in a phased manner. That’s why the first investment will only be about R600-million. But they are also looking to growth capital coming in to Lesotho where they have got the Letseng mine.

The government of Lesotho owns 30 % of that mine and they are going to plough R1,7-billion into growth capital at Letseng, where they get very big diamonds, way above average. It is the highest diamond mine in the world, because it is up in the Mountain Kingdom. Also, highest value diamonds, way above average and so they are very keen to plough more money into that Letseng diamond mine, as well.

Molebatsi: Explorers are turning their attention to Africa as the price of rare-earth elements continues to soar.

Creamer: Well, when we say soar I mean you look at just one of those 15 rare-earth elements, Samarium, in the last 12-months its price has gone up by 1 256 % and it is still rising. So, we have these 15 rare-earth elements suddenly in huge demand, because they go into all the modcons, they go into all the high-tech elements.

We are talking wind power, solar power, iPads, renewable batters, these are the sort of things that use the 15 rare-earth elements. China, because they saw the demand for these – they are the 97 % world suppliers – they cut their exports by 40 % and then by a further 35 % so people have run around trying to find rare earths and we are now getting, possibly our second mine in South Africa.

We know that Steenkampskraal in the Western Cape, mainly a monzanite mine, will be coming through in 2013. Now there is a Frontier Rare Earths listed in Canada, which is looking at a possible Zandkopsdrift mine, that is in our wild flower area, in Namaqualand. Talking about 2015 coming in with rare-earth.

There is another company that is about to list in Canada, Namibia Rare Earths coming in to Lofdal in Namibia and people running around Tanzania and also Malawi for rare-earths, the prices of which are really doing well.

Molebatsi: 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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