Every Friday morning, SAfm’s AMLive’s radio anchor Tim Modise speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Modise: In an hour’s time South Africa will be launching its first major onslaught against global warming with the opening on a new clean-coal technology centre. Tell me more.
Creamer: At nine o’clock today the Minister of Minerals and Energy Buyelwa Sonjica will represent South Africa’s first onslaught against global warming. She will be opening this new clean-coal-technology centre called the Centre for Carbon Capture and Storage.
This carbon capture and storage is something that was punted by the new US President, Barack Obama, during his campaign. We also see that the Prime Minister of the UK, George Brown, is saying it must happen. The International Energy Agency wants 200 of these before 2030.
At the G8 Summit that is coming up soon, this is going to be an issue. People are really backing coal. We are a coal-based economy and we can see the world not wanting to move away from coal. Even though this carbon capture-and-storage technology is going to be expensive, they are still backing it ahead of going straight into nuclear.
If it becomes too expensive, nuclear might very much come into its own beforehand. What is envisaged it that the carbon capture and storage is taking that carbon dioxide that is pumped into the air by these power stations, capturing it and then injecting it into the ground.
It is a way of giving a breathing space so all the renewable energy initiatives can come in that will not be carbon forming.
Modise: The pouring of the first commercial gold from under the City of Gold is on track for the middle of this year. I thought mining was taken to other parts of the country and was no longer taking place in the City of Gold.
Creamer: Johannesburg, mining began here 123 years ago. We have forgotten about those days, but they’re returning. We see Central Rand Gold, which is listed on the London Stock Exchange and the Johannesburg Stock Exchange, now coming forward with an announcement that the first commercial gold coming out of there will be mid-2009.
By the end of 2009 they will be producing at a rate of 100 000 ounces a year. Then they want to move in 2010 to 250 000 ounces and eventually a million ounces a year from 2012. There is still a lot a gold under Joburg.
This is now being recognised by this company, Central Rand Gold. They are using techniques that are new, of course. There will be low-noise blasting and no mine dumps. They promise that they won’t pollute any water and they are using mechanised mining techniques more common in coal mining.
So, we see a lot of difference there now coming through. These old names that we remembered like Consolidate Main Reef, which is where they have started mining now, Crown Mines and Village Deep, Robertson Deep, all there old names are starting to come back on to the radar screen.
Modise: Finance Minister Trevor Manual is offering a 100% tax write-off to new small-mining initiatives.
Creamer: Yes, Trevor Manual wanted to emulate Canada. They have the flow-through scheme, which has created a mining investment culture second to none, with big investment in Canada, Toronto and Vancouver.
We thought that we are a mining country and we needed to emulate this. Trevor Manual then got studying this with his Treasury and then decided with the Minerals and Energy that they were going to reject this idea of just copying the Canadians with their flow-through scheme and would introduce a new scheme, which is quite interesting and it actually begins with the investor.
It looks like creating a new class of investor and venture capital companies. So, it is going to require people to come up to the plate to start making sure they benefit from this, but the people that will invest are the investors which are either individuals or listed companies.
They will have a generous 100 % tax right-off, but they have got to invest through funds that have still got to be formed. Venture capital funds and venture capital companies are the companies that will invest in the junior miners. There are a lot of conditions.
If there is any criticism it is perhaps because Trevor Manual is now targeting the very-low, bottom-end of the junior mining spectrum, and some people are a little bit disappointed with that, they wanted it more holistic.
It could be a good starting point and it is a very interesting model and it could create this culture that we have been looking for in investing in miners, particularly in the junior mining fraternity, and in exploration.
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.