http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.10Change: 0.00
R/$ = 11.95Change: -0.08
Au 1206.83 $/ozChange: 0.76
Pt 1150.50 $/ozChange: 2.00
 
 
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  
 
 
Oct 28, 2011

28/10/2011 (On-the-Air)

Back
polpod_28112011
 
 
 
Construction|Engineering|Port|Africa|Building|CoAL|Copper|Export|Mining|Ports|Projects|Transnet|Africa|Iron Ore|Iron-ore|Power
Construction|Engineering|Port|Africa|Building|CoAL|Copper|Export|Mining|Ports|Projects|Transnet|Africa|Iron Ore|Iron-ore|Power
construction|engineering|port|africa-company|building|coal|copper|export|mining|ports|projects|transnet|africa|iron-ore|iron-ore-person|power
© Reuse this



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: Very interesting that as the nationalisation talk continue here in the country, the government of Chile is taking steps to nationalise half of Anglo American’s Chilean assets.

Creamer: This is the Codelco deal. I think there needs to be a howl of protest from South Africa. Anglo American is a South African created entity and there are a lot of shareholders here, pension funds, provident funds, disadvantaged and advantaged South Africans in this.

What is happening with this Codelco deal is that the State of Chile is flexing its muscle for national pride, because they are losing out on their status as the biggest copper miner in the world. Now they are seizing assets. They are using a document, which was signed in 1978 with Exxon, an American company that was developing assets in this area.

What has happened is that Anglo American has now gone into Chile and they’ve developed a lot of copper assets there. They are just completing a rather large mine, the Los Bronces mine. Along comes this opportunism from the State-owned Codelco saying that they are going to exercise the option and take half of Anglo’s Chilean assets.

So they will take half, but not paying the full price. They want to offer $6,5-billion. All the analysts that look at this say that it is not the value, they are short changing this by about $3-billion and then on the money that they give to Anglo, they are going to tax them by nearly $1-billion. It is a forced sale on a private sector company that has invested well in Chile.

This Los Bronces mine is neighboured by the State-owned Codelco, so they are obviously looking over the fence seeing how well this is developing and they are going to get that for nothing, because that has cost something like $3-billion to develop.

If they get all these assets, which include smelters they are going to do very well and they are looking for cash to expand themselves. I don’t think that they should do it in this way. I think it is very distasteful, because they are using their State-ownership and their nationalisation to actually seize these assets.

Gwala: You said they are short changing them of $3-billion. What is that in rands?

Creamer: That is about R20-billion.

Gwala: That is money belonging to South Africans mainly?

Creamer: It is shareholders around the world, but we know that Anglo American is very deeply involved here. This company was created here in 1917 and a lot of the investors here are our local pension and provident funds. I think they are short changing us and our diplomats should be knocking on their door very hard.

Gwala: Construction is expected to begin next year on a new R12-billion rail line through neighbouring Swaziland.

Creamer: I must say the new CEO of Transnet, Brian Molefe, is already starting to make things happen. We have always been complaining that the State-owned Transnet falls behind the private-sector coal terminal down at Richards Bay.

Well Molefe has quickly reversed that situation and there is now a stockpile down there, because he is getting so much coal down the line. Record volumes of coal 1,6-million tons in September and he is sustaining that. That should mean that he is up to 72-million tons. This is very good for South Africa, he is now putting pressure on the private-sector port.

They used to put pressure on the public-sector rail transport and he is starting to reverse that. It seems as though he has just set in place some basic things, like arriving on time to collect, delivering on time and this is working. Those performance targets are in place, but again to relieve the issue in quite a macro-way he wants to build this diversion through Swaziland.

So, instead of the coal line being interrupted by general freight, this general freight will go through the Swaziland link. He is now talking government-to-government with Swaziland and the State-owned rail authority in Swaziland. The expectation now is that the construction will start on this new link, which will then more then match the port.

Again, this is good for South Africa. We lost out so badly on not being able to export, because of logistic inefficiency and along comes Brian and he is starting to sweep clean.

Gwala: Quite interesting, because a couple of days ago he also reported profits, so it means the money is there, now what he needs to do is just implement.

Creamer: Exactly and he is taking on the issues like this coal line, and the manganese line is another issue. The iron-ore line is going very smoothly. A lot of people want to take the manganese down the iron-ore line, which I think is quite a good idea. Brian is saying no, right or wrong I’m taking this to Port Elizabeth to Coega. Of course, that is going to mean investment because they are going to have to do a heavy-haul line there to the Port of Coega.

Gwala: A staggering R90-billion of foreign capital is being invested Mozambique mining projects.

Creamer: This is lost opportunity. South Africans have lost out here. The world has seen how valuable the coal assets are in neighbouring Mozambique, particularly the Tete province. We used to be there and we just lost out totally. In came the Brazilians who have invested very heavily in the coking-coal side, which is very valuable coal and is not like the coal that we take down to Richards Bay, which is thermal coal. What they are going to take to their ports there is coking coal.

It is high value stuff. We know that the Australians do that in Queensland and that is why that Queensland province is so rich. So, South Africans have been somnambulant while the Brazilians have come in to next-door neighbours Mozambique, invested heavily. Rio Tinto another huge enterprise in mining is also investing heavily there and have just taken over the Riversdal assets.

There are a lot of other peripheral miners. This is going to be the second-biggest coal export in Africa very soon after South Africa. That is all through facilitating foreign investment, because they are building the railway lines, the ports, they are doing the mining, they are going to build the power stations, because there is also thermal coal there. It is not as if its going to happen some time in the future.

Vale is already exporting that coal. So, they are already planning phase two. Rio Tinto say they are very comfortable to operate in Mozambique, what they are saying is that they are happy with government administration, there is not a high risk for investment. Twenty companies are going to go there on November 9 to work out how they can better serve Mozambique. You can see how people flock in when there is an opportunity.

South Africa has lost out on this Mozambique opportunity, the foreigners have come in and invested big. If you just look at the coal it is about 61% of that R90-billion that is going in there and all the other commodities making up that R90-billion, as we get from Frost and Sullivan’s research department.

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.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other SAFM
More
 
 
Latest News
Tongaat Hulett CEO Peter Staude
Updated 3 hours ago Despite a record year, Tongaat Hulett’s starch and cellulose division was impacted by load-shedding during the year ended March 31, CEO Peter Staude said in a telephone interview on Monday. “The starch and glucose operation, which is the only wet-miller in...
Updated 4 hours ago The Competition Commission has referred a case of alleged collusion against JSE-listed construction materials company Dawn, along with its subsidiaries DPI Plastics, Ubuntu Plastics and Sangio Pipes, to the Competition Tribunal for prosecution. The commission alleged...
Updated 5 hours ago JSE-listed Rhodes Food Group grew its turnover 12.4% to R1.3-billion for the six months ended March 29, while normalised operating profit was up 17.3% to R126-million, the company reported at its interim results presentation on Monday. The company’s normalised...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
FREDRIK JEJDLING Sustainability becomes an important part of a business’ decision-making process
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...
 
 
 
 
 
 
 
 
 
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