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: An exciting new China/Africa investment fund throws its full weight behind the local beneficiation of South Africa’s metals and minerals.
Creamer: Mine and escape, that used to be the thing, get the metals and minerals and then do things with them elsewhere. Africa is not allowing this at the moment and that is fantastic. They are all singing from the same hymn sheet and we find countries like China wanting to collaborate.
This new fund is an example of collaboration where the Chinese say that we want the metals and minerals and Africans say that we want to add some value to them in Africa, so create a fund that can facilitate that.
This new fund is exciting from that point of view. It is the China Mining United Fund and it is the second version of it. It is a private equity fund and they want to come in near production stage, which may be a bit of a fault of the fund, because you like to get them also at exploration stage where the risk is there.
But, what they are saying is that they will also come behind the whole concept of reindustrialisation and industrialisation, which is exactly what our Ministers are saying. They are in China this week and talking about this whole thing and we see it manifested in the fund.
But, what is so great about this is that we had people in government that have now moved into business and one of them is Dr Alistair Ruiters who spent 11 years as the director-general of the Trade and Industry. So he understands this and now he is leading this new fund in Africa. That sort of depth is also important where a person gets good exposure in government then comes into business.
He is the Ruukki South Africa CEO at the moment, which is part of a much bigger Kermas group, Croatia-linked, and it is strange that the Croatians see the whole picture clearer then the South Africans, again this foreign involvement, and get this Chinese involvement. I think the China United Mining Fund has potential to help us reindustrialise with funding from China.
Gwala: One mining job in South Africa benefits 26 other people, a new 370-page research document – paid for by the Bafokeng community – finds.
Creamer: The Bafokeng, so dependent on mining. They have got their own operations now and they are the biggest shareholder in the world’s second biggest platinum company Impala Platinum.
They have obviously got to take any interference in mining very seriously and with the calls for nationalisation they have set up a massive study and it has ended up as a 370-page study. I
t has inputs from all over the world like Harvard University of the US, Lulea of Sweden and our three universities here Wits, Stellenbosch and Cape Town giving the thumbs down to nationalisation, but not in strident way. Acknowledging that there is popular anger that has to be dealt with, but saying that the way to do this in a developmental way is not through nationalisation.
Just look at how the mining spreads. One mining job underpins the livelihood of 26 other people. So, if you interfere with mining industry and you are unsuccessful the risk is huge because you are now dealing with 500 000 people are employed directly in our mines, that is 13-million people you are interfering with their lives. So, be very careful how you interfere with this.
They are also saying the dialogue is now urgent because they have linked up not only with all these international organisations and universities but they also linked up with the Southern Africa Institute of Mining and Metallurgy to be non-political to look at this in a non-ideological way. They say that dialogue is now urgent ahead of Mangaung.
They are using this document to set the scene for what needs to be done, because the big issue coming up is the resource rents tax. They are saying let’s not make South Africa uncompetitive by that, let’s really discuss that and make sure that it is not another serious impediment to investment which we already see slowing down very badly.
Gwala: New UK research could be a massive boost to South Africa’s treasure trove of platinum riches.
Creamer: We’ve got these platinum riches, we know the platinum price is down, now that is just a short term hiccup in the whole history of this.
Platinum is hugely valuable and the rest of the world sees it. We also, through our Science and Technology Ministry, and the Trade and Industry Ministry, and Mineral Resources Ministry, put up R100-million behind the research of the new hydrogen economy and to fuel-cells which we have been talking about here. If we don’t move fast, you find that the others get ahead of us.
Five major government-backed research and development projects are now underway in UK to speed up the adoption of energy systems using hydrogen and fuel-cell technologies to bring them in to everyday use. We’ve also got our Ministries going, but the Ministries must realise that there is competition here. We talk about our platinum value and we’ve got this great opportunity, we don’t want to end up sending this platinum out again, we want to use it within our country, a sort of Silicon Valley.
But it is too many words at the moment and not enough action. We do see the Department of Trade and Industry with the special economic zones, but they need to move a bit faster on how they do this and what sort of climate you create for developing fuel-cell technology and the new hydrogen age. Here we have got this opportunity because there is no substitute for platinum.
So, why not use this as a window of opportunity which the Anglo American CEO Cynthia Carroll she told COP17 in Durban last year that the window is wide open. We must get through this because it can create hundreds of thousands of jobs, if we do it correctly. So again let’s see that we can get ahead in developing a Silicon-type Platinum Valley for our platinum treasure trove so that we can do a lot of the value additions here.
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.