http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 15.23Change: -0.18
R/$ = 13.67Change: -0.13
Au 1125.25 $/ozChange: 1.15
Pt 1007.00 $/ozChange: -5.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Feb 27, 2009

27/02/2009 (On-The-Air)

Back
podsafm_27022009
 
 
 
Engineering|Africa|Building|Consulting|Mining|PROJECT|Projects|Sustainable|Systems|Training|Water|Africa|Systems|Consulting Engineers|Infrastructure|Iron Ore|Iron-ore
Engineering|Africa|Building|Consulting|Mining|PROJECT|Projects|Sustainable|Systems|Training|Water|Africa|Systems|Consulting Engineers|Infrastructure|Iron Ore|Iron-ore
engineering|africa-company|building|consulting-company|mining|project|projects|sustainable|systems-company|training|water|africa|systems|consulting-engineers|infrastructure|iron-ore|iron-ore-person
© Reuse this



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

Makwetla: As you said earlier bucking the trend, South Africa’s biggest iron-ore miner Kumba is spurning cutbacks and opting instead for 2009 growth, despite the global economic crisis.

Creamer: There are too many companies just falling flat during this economic meltdown and cutting back and retrenching. It is great to see a company that is not doing that and is in fact going to grow in this adversity.

It is in an area of iron-ore and iron-ore might be special and not all commodities are like this, but Kumba are saying that, market permitting, they are going to continue growing.

How are they able to say this? While we were reclining on the beach during December and soaking up the sun, their marketers where in North Asia saying, “will you take more of this and that”. They are now selling into second- and third-tier business.

So, already they are seeing a bigger demand out of China. Already their contracts in Korea are being held and might be taking more iron-ore. That is great for South Africa. This is the sort of spirit we should have in South Africa.

Why just fall down because there is a meltdown? Why not look at the marketing opportunities, particularly if you are number four like Kumba. The big BHP Billiton cutback, the big Vale of Brazil cutback, RioTinto cutback, that gives them opportunities and they are taking them. They are going to sell 10% more iron-ore, not less.

That means jobs in South Africa. They are going ahead with their projects and are not cutting back on them. That’s what mining companies are there for. They know about cyclical business and now there are down cycles and they should be planning for those down cycles.

We see Kumba setting an example there and we also see them saying that they can feel the pull of China’s fiscal stimulus already, which was set in progress in October, and they are starting to be able to divert iron-ore, was originally destined for Europe and Japan into China.

Modise: Tell me, Martin, about South Africa’s consulting engineers who are saying that they are deeply concerned about the dysfunctional state of South Africa’s municipal water infrastructure. What do they mean by that?

Creamer: Consulting Engineers South Africa are a rebranded body. They don’t say much, but when they say something, we must listen. When they said this week that they are deeply concerned, not just “concerned” but “deeply concerned”, about the current state of disrepair, of dysfunction, of overloading of water and wastewater treatment works operated by some local authorities around the country, we have got to take note.

As you know, we are going to invite 300 000 people here for our football. We have got some fantastic sports stadiums going up, but it is no good if your sanitation is down the drain, if your sewage and water treatment systems are down the drain. It is fantastic that we are going to spend R787-billion in the next five-years on new infrastructure, but what about maintaining the old infrastructure?

The consulting engineers of South Africa are not just criticising; they are also saying that they are willing to help. Already they have put out their hand to six municipalities through the Project Development and Facilitation Alliance and already they are saying that local authorities have got to look at life-cycle management.

They are not just talking, they will set up training schedules to train people in this, but the government has also got to come to the party by not undermining the status of the municipal engineers, which Consulting Engineers South Africa hint at when they say that the municipal engineers have apparently been undermined by government-appointed processes.

Now there needs to be a meeting of the minds here. We are South Africa, and we are doing things together, let’s turn around our problems. We don’t want to hear again about disrepair and dysfunctional overloading of water systems when we are building fantastic stadiums.

Let us get the basics right and I think that government and the municipal engineers should take up the offer of Consulting Engineers South Africa to help with this.

Modise: Now, Absa Capital-Barclays is sounding a dire warning on the spectre of BEE bankruptcy in South Africa. Obviously financial problems there.

Creamer: Banks aren’t the most popular institutions in the world at the moment. In fact, at this point, one would like to say to banks, “if you have got a problem, you solve it”, seeing that it is banks that contributed so much to the global economic meltdown.

But, this is also a South African problem. This was a South African problem because we said black-economic empowerment was crucial to our future. We need to bring blacks into the business mainstream as owners. We did that thinking that certain growth would be in place and there wouldn’t be meltdowns.

Perhaps we haven’t priced the risk properly and now the risk has come back to bite us. It is not often that a bank comes out publicly with its problems. Absa Capital and Barclays of London have bared their soul over this.

They are saying that they are unable to accommodate defaulting BEE transactions. They are going to be unable to accommodate them, so they are giving notice that they are unable to accommodate them. Because of current illiquidity, and because of the new oversight of banks, you can’t just allow these things to go on.

But, what do we do as South Africans and what should we have done in the past to make BEE sustainable? They are saying that there are three things that could happen now. Maybe the BEEs could come to the party by consolidating the situation, because we have this diseconomical fragmentation, based on the fact that people said they wanted broad-based BEE.

Now you’ve got this diseconomics of fragmentation that doesn’t look good when things turn down and there is a meltdown and no cashflow.

We have also had a situation that perhaps there can be some meeting of minds between mining companies that got involved in this and also government on some sort of deal to make sure that these BEEs are sustainable. Do we want them or do we not want them? I think they are extremely important for the country.

We have put them in place and Barclays Absa are warning that to do nothing is like playing Russian roulette. They are saying that this could give rise to subprime-like banking writedowns or even worse. So, we have the warnings from the banks, we know that the BEE space is important and was all about wealth transfer.

Do we want to continue to do this? I think as South Africans we need to get together now and sort out this BEE problem and one of the issues they say is, in future, we should price the risk and manage the risk and make sure we even hedge. Although hedging is a profane word to a lot of mining companies, you need to have that insurance against risk.

Modise: 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
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other SAFM
South Africans once mighty gold mining companies are preparing for worst-case scenarios. A major effort is being made to get cargo off the roads and back on to rail using a new app. The full weight of legislation is being thrown behind South Africa’s new...
More
 
 
Latest News
WBCSD CEO Peter Bakker
Updated 10 minutes ago South African power utility Eskom is participating in the World Business Council for Sustainable Development’s (WBCSD’s) microgrids programme, itself a subcomponent of the council’s larger Low Carbon Technology Partnerships initiative (LCTPi). WBCSD CEO Peter Bakker...
Updated 11 minutes ago Redefine Properties will for the first time be included in the FTSE/JSE Top 40 index, making it one of the 40 largest listed companies in South Africa by market capitalisation.  Redefine’s inclusion in the Top 40 was announced by the Johannesburg Stock Exchange on...
Former President Thabo Mbeki
Updated 14 minutes ago Africa loses more than R50-billion every year as a result of the illicit flow of funds, former president Thabo Mbeki has said. "Africa faces the great challenge of large volumes of capital leaving the continent illicitly - money that our continent needs to address...
More
 
 
Recent Research Reports
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
The Health and Welfare Sector Education and Training Authority (HWSETA) has joined forces with Tshwane North Technical, Vocational and Education and Training College (TNC) to train 100 young unemployed learners as artisans, and marked this with an event that took...
JAMES TEMPLETON The increase in distribution is as a result of Emira’s acquisitive growth
JSE-listed Emira Property Fund reported distributions per participatory interest (PI) of 134.27 c – a distribution growth of 9% – for the 12 months to June 20, 2015.
Earlier this month ground broke on South Africa’s latest four star green building – the first of its kind in the Eastern Cape. The modern three-storey office block is located within the Baywest City precinct in Port Elizabeth’s western suburbs, along the N2, and...
South African armoured and mine protected vehicles company Denel Vehicle Systems (DVS) has won its first order since becoming part of the Denel group at the end of April. "It's a sizeable contract," reports DVS CEO Johan Steyn. "We won the contract in July. It's a...
South African guided weapons, unmanned air vehicles (UAVs) and space company Denel Dynamics plans to increase its revenues to more than R2-billion within five years. This was reported by company CEO Tsepo Monaheng at its annual "Show and Tell" briefing in Centurion,...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96