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Oct 19, 2012

19/10/2012 (On-The-Air)

Engineering|Africa|CoAL|Design|Diamonds|DT Gas Systems|Engineering News|Eskom|Gas|Hydropower|Industrial|Industrial Development Corporation|Industry|Johannesburg Stock Exchange|Mining|Mining Weekly|Petroleum|Pipelines|Projects|Rockwell|System|Systems|Toronto Stock Exchange|transport|Africa|Angola|China|Egypt|Mozambique|Poland|South Africa|USD|Automotive|Energy|Energy Strategy|Equipment|Liquefied Petroleum Gas|Systems|Infrastructure|Martin Creamer|Power|Pipelines|Engineering News|Southern Africa
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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: Eskom has drafted an African energy strategy, with the primary focus on opportunities in Southern Africa.

Creamer: They have finalised this draft strategy for Africa, which they have been working on for some time.  It does turn out that they are looking more firmly into South Africa, that is because some of the opportunities here are not only for them to get involved into generation in Africa, and this strategy involves that, but also equity. 

They are looking particularly at Mozambique and these two near-term hydropower projects, which they would very much like to get involved with.  We know that we have been getting power from Cahora Bassa for many years now – 1 500 MW – unfortunately, due to problems, that has been cut down to 900 MW at the moment. 

They are trying to push that back up to 1 500 MW.  There are also two new addendums to hydropower, which could mean that we could lower our carbon footprint and that we can be getting energy that is not related to coal.  So, obviously ,they are keen on that.  But there is also a bigger picture emerging in Africa as Eskom is thinking Africa, so are the heads of State taking decisions now on 50 new projects worth US$40-billion. Maybe the two mines will come together. 

Our cabinet will still have to decide on the strategy put forward by Eskom because the government is, of course, the sole shareholder for Eskom and it calls the shots.  We know that these fifteen projects have been coming up in Africa now and that they are between now and 2020. Nine hydropower projects coming through, four big transmission projects coming through, two petrol pipelines coming through. 

When you look at Eskom’s particular capability in transmission on design you think they really could play a role when they talk about this link from Egypt to South Africa and the links in transmission from Angola to South Africa.  So I think we need to watch this space.

Gwala: Hundreds of minibus taxis are now equipped with LPG kits that cut pollution and lower operating costs.

Creamer: This is something that is being promoted by the Automotive Industry Development Centre (AIDC) and also the Department of Transport wanting an LPG addendum.  They have been talking about it for a long time and initially they’ve said taxis in the inner city could be LPG taxis and they would obviously have a lower carbon emission and this will be good for the city. 

It doesn’t really work like this, because taxis go into the city and out of the city and you need them to be able to switch from one to the other.  So we have got 32 000 minibus taxis here in Gauteng and 300 of them have now switched over to this conversion kit where they can go to liquefied petroleum gas (LPG) and also the normal fuel through an automotive conversion kit.

The AIDC has called for expressions of interest to manufacture these LPG kits locally because at the moment we are getting them in from Poland, from DT Gas Systems.  They cost about R20 000 a system, so it is a bit off-putting, because they have got a programme now, although the first 300 are expected by February 28, and another 110 taxis would have been done.  This is still a small percentage, just over 1%, that would have been done. 

It shows the direction that they want to move these taxis in, because the carbon emission does lower their operating costs and it can create a bit of an industry. DT Gas of Poland is quite willing to partner local manufactures so that they can make these kits locally. 

The AIDC is moving with the Department of Trade and Industry and the Industrial Development Corporation to try and provide funding for local manufacturers who are interested and also to help them finance the infrastructure that will be needed, particularly the skills.

Gwala: Small diamond miner Rockwell is thinking out of the box and allowing small-scale miners to get a share of the action on its mining concession.

Creamer: We know that miners are often looking over the fence and we saw the illegal mining activity.  We know that there is a lot of illegal mining in Africa, but not as much in South Africa. People say why aren’t you mining that property over there, you’ve got this massive concession.  The miner will say that it is not economic from them and the volumes are too small.

Rockwell, which is listed on the Toronto Stock Exchange and the Johannesburg Stock Exchange, is saying ‘look, lets create some space.  We are also a small junior miner but lets create some space for the smaller operators, because one person’s meat is another person’s poison.’ 

They are saying that there are pockets on their land, which they don’t want to mine, because they know it is unprofitable because their overheads are such that it is not going to make a profit for them and the volumes are to small. But bring in the small operators and they have already appointed four of these one is already operating and another should be operating by the end of this week. 

That is that these operators will foot the bill for the equipment that they use, they will fit the operational costs, but the company, Rockwell, will come in and take the diamonds that they’ve produced, they will market those diamonds.  They will also train them and give them the land, because that is the big issue. 

Then Rockwell will take a little bit of a royalty from that. So it is a sort of win-win situation in Klipdam near Kimberly. We now that at Tirisano in North West province, and we also associate Kimberly with diamonds and not the North West province where you think of green mielies. 

This Tirisano mine is quite and interesting one because it has got the smaller bridal diamonds which is a higher volume diamonds.  Those do very well in China particularly with engagement ring demand and that demand also continuing whether there is a recession or not people are getting married. 

So they are bringing in these four operators, small-scale operators onto their land and hoping that they may be able to get more in time.

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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