Every Friday morning, SAfm’s AMLive’s radio anchor Sakina Kamwendo speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Kamwendo: Tharisa Minerals this week launched a R760-million strategy to boost South African chrome supply.
Creamer: Yes, this Johannesburg Stock Exchange listed company has got a very big property on the way to Sun City in Marikana. They had foreign and local journalists out there this week to tell one big story that there is going to be a chrome ore deficit. Now, you just heard Wayne McCurrie say mines haven’t been spending.
This is resulting in these deficits. Last time we had a chrome deficit we had a good response. We are the biggest supplier of chrome ore here, we should be on top of everything. What happened when the price spiked last year, you saw people jumping in all around the world to supply that, they are not really big traditional suppliers, but they liquidated their stockpiles etc. and we also had illegal mining here. What Tharisa Minerals is saying now is lets anticipate this deficit and start spending money now to try and make sure that we can meet this demand that is coming up.
They are launching a R760-milliong growth strategy and it takes place in steps with various projects so you can cope with it. So, you can start putting more chrome concentrates into the market. Why? Because China wants that. We used to be the big ferrochrome producer here and we have lost our edge. China has got that market, because it is producing stainless steel in a big way. Stainless steel production is growing by 3% to 5% a year, so it needs the chrome otherwise it won’t be stainless. They are saying that the Chinese market has changed.
China used to make the stainless steel and export it, now China makes this stainless steel and consumes it. That is how it is going into your washing machine and other household goods. They are now working on a growth strategy and you can see it there on site with all sorts of activities going on. The interesting thing about this company is that it produces platinum group metals and chrome and it does it in a very interesting way.
It says that the danger for chrome is that its barriers to entry are lower, so that other people can jump into that market. That is why they are wanting to put up proper processing plants, spend the money so that South Africa can bring in the foreign exchange, build the skill and develop that local economy.
Kamwendo: De Beers long wait for diamond exploration licences is over, thanks to the new winds of political change.
Creamer: De Beers, Phillip Barton, he was really struggling to get prospecting licences. This struggle has gone over two years. Nobody could understand why the Department of Mineral Resources (DMR) wouldn’t give these exploration licences, because exploration is about risk, you don’t know what you are going to do. So if they are prepared to spend R30-million to R40-million let them do it.
One would expect that they roll out the red carpet, but it didn’t happen. Now, all of a sudden with the winds of change blowing through South Africa, the prospecting licences are coming through so fast that during our interview they told us there were 13. By the time we wrote the story they told us they had got 16. The wonderful thing about this is that they are going for 54 licences, so this could be a resurgence of diamond mining exploration.
If anyone knows about diamonds, it is De Beers. They are staying that South Africa is still highly prospective from a diamond point of view. What does it mean? It means that there are potential mines lying out there that we haven’t developed. They are saying that these particular first 16 are all in the Kimberley area.
One of the things that are really exciting is that he is hoping to one day potentially go back in glory to Kimberley because he is quite convinced that of the 16 around there they are going to get at least one solid good mine and that will be great for the economics of Kimberley and South Africa in terms of getting back to diamond mining. It all began 130-years ago and if we can resuscitate it then it would be wonderful for the company.
Kamwendo: It's been another record-breaking coal export year for South Africa's Richards Bay Coal Terminal (RBCT).
Creamer: I have got great respect for the RBCT. Why? Because it is a typical example of how the State and private-sector can work together seamlessly. Why do you have to have any angst? You have the State railing that coal and working the port and this is our biggest export at the moment. South Africa's biggest export is coal, that means we are getting revenue in from outside the country.
We are getting jobs inside the country and all sorts of activity around that area. I like the fact that they broke a record again. Coming in with exporting 76.47-million tonnes of coal despite the weather. You can see a lot of mining companies complaining about the weather, that is why their production isn't so good. 38 days lost to bad weather. Typical South Africans because we can make excuses up. What do they do?
They play catch up and then overtake to break a record. How do they do it? By cooperating with the State Transnet Freight Rail, which was there when journalists arrived last week. They were in the media briefing contributing so that they are part of it. In the middle is the private-sector terminal doing all their grading of the coal, which is a massive big job. Then the port, also State-owned sending this out very seamlessly.
There were a lot of ships queuing up, because of all these hold ups. Yet, they have managed to break the record, that must be the South African spirit. Not only that, but this company is nearly 30% black-owned and very interesting nearly 7% black-woman owned. As I am showing you now the chairperson, Nosipho Siwiza-Damasane, she does this job free, gratis and for nothing, it is a pro-bono effort. She used to be the CEO of RBCT, she has now moved up to the position as chairperson and actually working at Sasol. But she does this non-executive chairperson role pro-bono, free, gratis and for nothing.
Now that is the sort of spirit we need in South Africa, people doing their civic duty, putting their shoulder to the wheel so that we can get this economy going at a lower cost. Hopefully we will see more records broken from RBCT, because in actual fact you can see that the private sector has got 91-million tonnes worth of capacity there. The rail has got 81-million tonnes worth of capability. If they can start moving, South Africa will make more foreign exchange, we need this foreign exchange and our economy churning up.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.