http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.30Change: -0.09
R/$ = 11.09Change: -0.03
Au 1226.91 $/ozChange: 9.65
Pt 1342.00 $/ozChange: 10.00
 
 
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 Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Oct 28, 2011

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

Back
polpod_28112011
Coega|Construction|Engineering|Port|Port Elizabeth|Africa|CoAL|Copper|Engineering News|Exxon|Mining Weekly|Ports|Projects|Transnet|Africa|Chile|Mozambique|South Africa|Swaziland|USD|Los Bronces Mine|Port Of Coega|Building|Mining|Transport|Richards Bay|State-owned Transnet Falls|Brian Molefe|Iron Ore|Martin Creamer|Power|Rail|Queensland|Tete|Engineering News
Construction|Engineering|Port||Africa|CoAL|Copper|Ports|Projects|Transnet|Africa||||Building|Mining|Transport||Iron Ore|Power|Rail||
coega|construction|engineering|port|port-elizabeth|africa-company|coal|copper|engineering-news|exxon|mining-weekly-company|ports|projects|transnet|africa|chile|mozambique|south-africa|swaziland|usd|los-bronces-mine|port-of-coega|building|mining|transport-industry-term|richards-bay|state-owned-transnet-falls|brian-molefe|iron-ore|martin-creamer|power|rail|queensland|tete-province-or-state|engineering-news-published-medium
© 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
Updated 15 minutes ago The Independent Communications Authority of South Africa (Icasa) has called on interested parties to lodge written representations in relation to Vodacom’s proposed R7-billion buy-out of converged communications network operator Neotel within 21 days. Icasa outlined...
Updated 1 hour 7 minutes ago Industry body, the Wireless Access Providers’ Association (Wapa) has released a draft position paper on licenced and licence-exempt spectrum, the former of which allows service providers exclusive access to certain spectral frequencies, enabling them to deliver...
Updated 1 hour 54 minutes ago A high-level delegation of government representatives, led by President Jacob Zuma, will this week attend a series of events organised by the Open Government Partnership (OGP), scheduled to take place on the margins of the sixty-ninth United Nations General Assembly,...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 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 network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
MANUFACTURING CAPABILITY Reliable Transformers designs and manufactures dry-type and oil-filled power and distribution transformers up to 3.5 MVA
While Ekurhuleni-based transformer manufacturer Reliable Transformers currently designs, manufactures and tests its products according to the SANS 780 specifications for distribution transformers and other applicable transformer specifications, it is working towards...
GHAREEB SAAD Kaspersky Lab products contain strong heuristics engines that monitor suspicious file execution to detect attacks
Global endpoint security solutions company Kaspersky Lab has introduced new measures to prevent cyber criminals from accessing sensitive data, alongside its malware-signature and heuristic device analysis detection methods. Threats to mobile devices have increased...
MICHAEL FLETCHER Real-time information available to government when citizens use publicly funded Wi-Fi networks will enable it to communicate with citizens and provide services
To ensure uptake and a positive impact, Wireless Fidelity (Wi-Fi) networks in cities must be provided at schools, community centres and commercial centres to enable citizens and government to access information that will improve access to and delivery of services....
Eco-estate Monaghan Farm, located near Lanseria airport, north-west of Johannesburg, has taken a new approach to modern living and sustainability with its 517 ha development, dedicated to farm living.
Forklift and lift-truck distributor Goscor Lift Hi-Reach launched the Genie SX-180, the tallest self-propelled super boom in Africa, in Johannesburg last month. “As the official distributor of the well-known Genie range of equipment in Southern Africa, we are pleased...
 
 
 
 
 
 
 
 
 
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