Aug 20, 2010
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Letoaba: South Africa needs to target a sustained economic growth of 7% a year for 20 years to dent rampant unemployment. Is this possible?
Creamer: You know the Finance Minister Pravin Gordhan believes that time is opportune now for us to set a target like this, because we know that other countries are doing it. They set large targets and they achieve them. We also know that our unemployment level has breached the 25 % mark.
We now have between 4 million and 6 million South Africans sitting out there unemployed. We also have 4 million of those who are between 15 and 24 who have got matric and below that haven't got any prospects of jobs. That cannot continue.
We also know that with the World Cup, when we set our mind to something we can do it. It is only a matter of will. The Finance Minister says that it is now opportune and it's got to be a spectacular target and we have got to achieve it. We have got to go for a growth rate, a gross domestic product increase a year of 7 % growth rate for 20 years, not for one year and then stop.
We have got to go for 20 years in order to deal with this serious unemployment problem. Then also, of course, to get growth into the country, strong economic growth.
Letoaba: AngloGold Ashanti is studying the feasibility of going ahead with two large new gold mine projects. What are they likely to find there?
Creamer: It is interesting that gold is still being found quite close to where we are sitting here in Johannesburg. I mean, we know that Gold Fields has got the big South Deep project. We also know Harmony Gold is out at Doornkop and Elandsrand.
AngloGold Ashanti is looking at two new projects, which are described as very exciting. These are at the West Wits in Carletonville and also the Vaal River area where they have their mining activities already. They are studying projects in addition to what their current mining activities that will require about a billion dollar investment in each area.
They would give something like between 10 million and 20 million ounces of gold. They will also have a long life these mines of between 20 and 30 years. One of the things that is very interesting as they go deeper now they also demand higher grade and what they are finding there is higher grade gold.
We are talking about 20 grams a ton plus. This is a very good grade. So, very exciting prospects for AngloGold Ashanti. They are looking, of course, globally to increase their ounce production beyond the 4 million plus that it currently is, by another million.
They have got an embarrassment of riches when it comes to projects. These are two in South Africa and they are also looking at several in continental Africa, in Australia and the Americas that would give them another additional million ounces a year.
Letoaba: You spoke about him briefly, but South Africa's Finance Minister is willing to have a relook at failed junior miner incentives. Tell us about this.
Creamer: We have got to get the junior miners sector going. We know that government, business and labour met on the mining front and one of the things they said was that they must boost this junior sector and also boost more exploration.
We know that the government came out last year with a set of incentives. They gazetted them on June 1 and it was meant to help the junior miner to get into this space, but these have not been taken up, they have failed.
They have been too parsimonious, stingy if one could say that, and not reflecting the overall mining industry. They had a big build up and we thought we would get something equivalent to what happens in Canada with the flow-through scheme.
We can see that over 40 years in Canada those incentives have built a massive financial hub, a mining hub that assists Africa. We need to do something similar in South Africa and the new Finance Minister says he is willing to take new written proposals to see how we can boost this junior mining sector.
Letoaba: 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.
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