Every Friday, SAfm’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: South Africa needs to make the best of the huge crisis that has broken out in platinum mining, where 13 000 jobs are on the line.
Creamer: They always say make the best of a crisis and this is really a crisis that has arisen. Mainly a political and economic crisis. We are heading towards an election now and we saw the Minister of Minerals and Resources Gwede Mantashe become very angry at the notification that was put out by Impala Platinum that it was going to cut 230 000 ounces of production over two years, which will mean job losses of 13 000 and five shafts closing. He described this as being mindless.
What is happening in the mining industry now, is that when they wanted to retrench people they used to put out Section 189 notices of the Labour Relations Act. The Department of Mineral Resources is now turning back on that approach and saying no, you must go with Section 52 of the Mineral and Petroleum Resources Development Act, which looks at alternatives.
Now, we know that one person’s meat is another person’s poison and sometimes when major companies want to close shaft there will be smaller companies that can have a lower cost model and they can make money out of those shafts. We know that is how Patrice Motsepe with African Rainbow Minerals came in. He took the assets of AngloGold Ashanti regarded as low level and turned those to very positive account bringing billions of rands worth of profit out of that. This is the approach now that the go,vernment is wanting to see at Impala Platinum.
It also, earlier in the week gave that instruction to De Beers, which is wanting to close its mine Voorspoed in the Free State. That is obviously a lower number of people, 650 people, but still the government said to De Beers, hold fire, because we have people who approach us as a department wanting to buy assets. We will look back at those and say do you want to buy this? If it fits your criteria then you can allow them to come in and make sure that during this period where there is such bad unemployment, we don’t have more retrenchment.
Kamwendo: Major mining companies are in the process of reversing out of the business of mining coal in South Africa.
Creamer: Coal has now become a dirty word to a lot of these big mining companies. It is not only South African risk that they are looking at, but it is also shareholder risk. The shareholders are saying to them when you burn this coal in a power station to create electricity, you are damaging Mother Earth. You are putting CO2 in to the atmosphere. It is causing climate change.
So, you will note that South32, which is listed in Australia, London and Johannesburg, decided earlier this year that it was going to withdraw from coal. That coal that it owns is mainly in South Africa. Then last week, Anglo American said that they are drawing a line in the sand with coal, they are not going to go beyond their 14-year life that have in South Africa.
In fact, we see reference to 7-year life, meaning they could sell those assets during that period. They will not spend a cent on growing those assets unless it is really compelling. You saw this week that they completed their sale of the New Largo coal mine to an 80% black-controlled company, Seriti Coal, headed by the former president of what is now Minerals Council South Africa, Mike Teke.
Kamwendo: South Africans have moved at lighting speed to mine tin in neighbouring Namibia, where the government is giving them huge support.
Creamer: This is where the Minerals Resources Minister Gwede Mantashe must listen very carefully. We have this company AfriTin that has moved at lightning speed into Namibia. They will be producing tin in the last three months of this year. They only got their first money in November, they raised that in London.
They raised more money in May and they are already going to be producing tin before the end of the year. That is the sort of action we need from this government, because that same company owns tin assets in South Africa in our Bushveld. They have had permitting delays. So, this is the sort of thing that happens and that is why the Minerals Council South Africa has said to the government, the biggest problem really is getting new mines going, not fighting about closing old mines. You can see that in the case of Impala Platinum, they are burning cash at the rate of R3-billion a year. Now, you can’t go on doing that forever, that is why they planned this new strategy.
But, what my point is, rather let the new mines go forward fast. We see huge delays there, a totally different picture in Namibia, where there has been seamless cooperation.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.