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Aug 24, 2012

24/08/2012 (On-The-Air)

Engineering|Gold|Africa|Aluminium|Copper|Efficiency|Engineering News|Mining|Mining Weekly|Platinum|PROJECT|Technology|Testing|Africa|Martin Creamer|Operations|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: NUM and AMCU leadership have been sitting around the same table ahead of Wednesday’s CCMA verification exercise at Impala Platinum.

Creamer: There is an important verification exercise coming up. We know that the big problem started at Impala Platinum.

The issue of National Union of Mineworkers having a majority position, this is going to be verified now. So, on Wednesday the count will take place to see exactly what the numbers are, how many people are supporting NUM, how many people are supporting AMCU, the new union.

If it turns out that NUM on the Impala lease area has lost this majority, it then has three months to try and regain it. If it fails to regain it, Implats is now saying that they will unravel that agreement and they will come up with a new multi-union dispensation to accommodate this new multi-union situation.

Already they say it is visible if you just take the naked eye that there is a sort of a change of the following of the union membership. That is not good enough, it has to actually be done by the statutory body, which is the Council for Conciliation, Mediation and Arbitration (CCMA) has to go in there officially and to verify this.

This will be done on Wednesday. In the meantime, they say that the situations of NUM and AMCU leadership sitting at the same table which is very important. They have been fostering the idea that both are the voices of the workforce, that both need to come together.

The whole situation of the wages has come up, because there has been an international lie, that has been spread around the world that rock-drill operators (RDOs) earn R4 000 a month. The Chamber was at pains this week to say that is absolute misinformation and that it has gone around the world. The reality is that those RDOs earn between R10 000 and R12 000 a month.

And so that is a situation that has been confirmed at the highest level by the Chamber of Mines. We do have a situation now where some of these operations are becoming cash negative. There is a danger that there will be a lot more retrenchments if we can’t nip this whole thing in the bud.

Gwala: So much information around that. By the way that verification process we will certainly be following it very closely because it is very important.

The Chinese are ripping the heart out of Southern Africa’s aluminium smelting business through cheap over supply.

Creamer: This is a situation, we got into the aluminium business in a big way. Our whole eastern coast in South Africa, not only South Africa but Mozambique, started importing the bauxite because we don’t produce the bauxite here and the alumina.

Turning that into aluminium and it was a fantastic business and we were world leaders in efficiency, but along came the Chinese and they cracked the code.

They are producing at such a level now that these operations are killing particularly our Hillside operation and Bayside operation in Kwa-Zulu Natal are just becoming cash-cows that are not growing. T

he investment into them will cease because if you look at the production level of the Chinese now 80% of the demand growth to the year 2020 is already covered by projected supply.

In three years, 100% will be covered, which means there is just no room for growth for our operations here, particularly if Chinese come in at a very low cost, which they are doing. So you will find that BHP Billiton, which owns this, is not going to put another cent of capital growth into this.

They said that and made it clear. In fact, this has become a subject of impairment testing which means that it is in a fairly critical way. At the same time we can see BHP Billiton just putting its problem children together, nickel and aluminium, together. That is a bad warning sign for our aluminium business on the east coast.

It is such a tragedy because if you look at the actual physical sales of aluminium, it was the most heavily trade metal, so we would be making a killing at the moment, but because the Chinese have come in and disrupted this market, we have actually gone ex-growth.

Gwala: The black-owned, black-managed and black-operated Royal Bafokeng Platinum is taking steps to cut jobs and introduce mechanised mining.

Creamer: The situation in the platinum industry at the moment is focussing the mind. We noticed at the RBPlat, the Royal Bafokeng Platinum, a paragon of transformational virtue.

This is not only black-owned, black-managed but it is also black staffed and black operated.

They are having to pull in their horns at the moment. It was apparent at their presentation of results, because the actual members of the union were there, and you don’t often have that at presentation of financial results.

They were there because there was an announcement that they also needed to hear and the union is working with RBPlat on this, to actually reduce the labour count at the RBPlat business, Bafokeng Rasimone.

Also they made it clear that, going forward, they are going to introduce mechanisation at their new Styldrift project. That means that there is more capital-intensity and less labour-intensity.

We do see this coming through now, again at the Implats discussion yesterday, the new CEO Terence Goodlace, made it clear that mines are going to have to look at mechanisation. We know the gold industry made it clear that they are going to have to look at new technologies.

We’ve even seen Australia that the deferment of the massive big Olympic Dam project there in uranium and copper has been deferred so that they can look at new technology, that means fewer jobs. S

o in these high capital-intensity businesses, we must not expect enormous amounts of jobs. They create the wealth that creates the jobs further downstream.

So that is a situation at the moment with RBPlat, saying that you have got to be able to cut your costs because at least you will be the last to be belly up, which was something of a joke at the presentation.

Gwala: Expect more a little later on today. I’ve just received a message from the spokesperson from NUM Lesiba Seshoka that there will be a press conference at the NUM branch at Royal Bafokeng. So we are obviously expecting the NUM to comment on that announcement. 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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