Mar 30, 2012
Engineering|Port|Africa|Defence|Denel|Engineering News|Hydropower|Industrial|Mining Weekly|PROJECT|Projects|Africa|Mining|Martin Creamer|Power|Engineering News
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Gwala: Job-hungry Canada is luring South African investors with billion rand loans and cheap, clean electricity.
Creamer: When you think of the ‘j-word’, jobs, its on the lips of every government all around the world. Obviously with South Africa I feel, we should be emphasising it more. When you look at a country like Canada, a first world country, you’d think that people will be beating a path to do the door to go and invest there, because it is a safe investment environment.
Then you see the incentives that this government is able to hand out. Two South African companies now are looking at iron-sands projects and producing pig-iron there.
The manner in which they have been treated by this Canadian government is such that they are so keen to get there. If you look at Petmin, which is now listed on the Johannesburg Stock Exchange, its got this iron-sands projects there and it has got Canadian partners. Its already talking about 10-year interest free loans, above the billion rand level.
Then 25% of the wage bill is paid for five years. When you look at the long-term contract they are signing for power, hydropower, at like 2.5c US per kilowatt hour.
Those are the past days for us here, we don’t have anything close to that, so you can see that in order to get rid of this unemployment factor, these governments around the world they are putting their money where there mouth is.
I think that we need also to do that, to get this lesson of not having so many stumbling blocks and red tape and not even welcoming people. Here you get a South African company like Petmin champing at the bit now to get into this project, which it sees as very lucrative, because its going to make pig-iron and the US market is just seven days away.
They are close to a port, they have got a major iron-sand concession in Labrador. They are getting offered very attractive incentives from the government and they have got the structure set up.
The local community is part of the ownership and they have got local partners. Will they be looking at South Africa to invest? No, they look outside, because of the carrots that are dangled and I think we should dangle a few more carrots considering we have such a big unemployment.
Gwala: Wits University is responding to South Africa’s technical needs with strong new research thrust.
Creamer: This research particularly in mining which we’ve lost we saw this week that the vice-chancellor of Wits University Loyiso Nongxa, is planning now to put us back in the pre-eminent position where we were. He let the cat out of the bag at Wits’ 90th anniversary celebrations this week that he is giving us a peek at what he is planning.
This is like a world-class large-scale return to mining research in South Africa that we lost. Twenty years ago we’d have 600 to 800 full-time mining researchers, if you can find 40 now you are lucky.
Nongxa is wanting to turn this around again and make sure that where we have got strengths in South Africa, we build on them and we build on them aggressively. So this is what Wits is planning now by mid-year they should have a big new mining research institute in place.
We know that South Africa was the thought leader in mining, we mined the hardest rock the narrowest veins at the deepest depths and we also had a succession of metallurgical breakthroughs that were revolutionary.
We were the thought leaders in geology, but all of a sudden we are at the back of the queue. I can see now that the academic institutions are planning to make sure that we return to our pre-eminent position.
Gwala: What happened to our thought leaders?
Creamer: These people are mobile and when you see the big thrust in mining now in Australia, South America, Canada, they just take our people. They just put glossy ads in the papers and people vote with their feet.
Gwala: Just like investments we need to attract them back here.
Creamer: There has been this dalliance between South African Defence authorities and Denel and the Brazilians for some time now. Of course, its always a little bit hush-hush, because top brass from Brazil Air Force arrived in South Africa this month, but we didn’t know about it, we only find out once they release their statements when they get back home.
This is typical of the defence arrangements, they don’t let you interrogate what they are doing. What we can see from a distance is that they’ve definitely signed a new memorandum of understanding with our State-owned Council for Scientific and Industrial Research, particularly around infra-red technology.
But then, they also come to check on the investment here, because there is a joint investment in air-to-air missiles between the Brazilian Air Force and the South African authorities Denel, leading the show with Denel Dynamics.
We have got Brazilians sitting in Centurion here, they have also got a team in Brazil and South Africans reached an advanced stage on their A-Dartar air-to-air missile. We didn’t really have all the funds then to industrialise it. We have done a lot of development.
The Brazilians at the same time were looking for an air-to-air missile and instead of like reinventing the wheel, this investment is a third of what they would have had to do. Lets join a 50-50 joint venture and do this thing together.
We will be partners, but you will have the rights to build them in South Africa, we have the rights to build them in Brazil, but lets see how this whole thing can roll-out. They’ve already put close to a billion rand investment into this and the Brazilian Navy is also saying that they would like to have surface-to-air missiles as well.
There are expansions coming into the original agreement. In the meantime it is focussing very much around this A-Dartar air-to-air missile and they are wanting to manufacture that. I read in the Brazilian media they think they have got orders for about 100 or 200 of these already. There is an export market out there as well.
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.
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