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On-The-Air (05/06/2015)

safm5june2015

5th June 2015

By: Martin Creamer

Creamer Media Editor

  

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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: Strong calls were made this week for South Africa to follow the Canadian and Australian models of encouraging exploration – or run the risk of losing out on exploration investment altogether.

Creamer: This was at the Junior Indaba where strong calls were made again for incentives for juniors. We know that the other mining jurisdictions do this with Canada leading the way. We see Australia following, but we could have followed in the late 2000’s. Our Treasury said that we were going to introduce the flow-through scheme.

They actually said during a Budget speech that we are going to get this then all of a sudden they didn't actually go ahead with the legislation and they introduced a very weak scheme, which nobody has taken up except some technology companies. It has really been an abject failure and at the same time you can’t have mines if you don’t have exploration. We have got an industry here, which will flounder if it doesn't actually support this exploration effort.

We see that the Council of Geoscience is underfunded and to get funds they go outside of the country to do exploration research. We need it done in the country and this is the call of the juniors saying that they will go to Botswana and other jurisdictions because they are far friendlier. Why should they stick around here when it is high risk and the banks won’t fund them. In Canada, it is brilliant because it is an efficient system

The flow-through scheme, if an investor gives a rand to an explorer listed on the stock exchange, that explorer spends the rand, when he spends the rand there is tax on that. So, the government gets that. Then, at the end of the year, that investor can claim back the rand as an expense so it can be written off on his tax. It has been working very well. If you go to Toronto and you see those high skyscrapers, it has come about because of all the investment like this. You can see Australia go with it now and we need to go with it, with the Davis Committee on tax coming up.

Kamwendo: After decades of under supply, South Africa now has a major over supply of mining engineering graduates, with many of them sitting at home jobless.

Creamer: This has been highlighted in the SAIMM magazine where they have come through now saying that graduates are sitting jobless. We used to have people complaining, ‘where are all the mining and engineering students?’ Now we put them through in large numbers. We have actually transformed.

Most of them are black, a lot of them are women, but they have got no work. Remember a couple of years back these students started getting this message of looming potential joblessness. So, they called in the Minister and there was a big gathering of students at Wits saying what are our prospects. Well, people tried to brighten things up. But we can see now the reality has hit and a lot of these students have actually formed a Society of Mining Engineering Students that actually come to me and told me to publicise this.

Of course, we have got wonderful brains out there and one of them is Dr RE Robbie Robinson and he has been working on what he calls ‘mining clusters’ for so long. He called very strongly this week for a research revolution saying that all these people have been trained brilliantly, world-class training. If you go into some of these mining and engineering facilities you will see that they are mediated by information technology, 3D technology and they really get good world-class training. After all this, they are sitting at home jobless and they will leave the industry.

The whole purpose of this is being defeated. Robinson is saying, let’s go into a research revolution and start these mining clusters that he has been calling for for such a long time and let these students be involved in the mining sector in these clusters and at the same time, do a lot of teaching and educating to others.

But, the economic underpin must be covering these slime dams and waste mine dumps we have where we know there are metals and minerals. There and also to have an agricultural cluster, that is what can really give the jobs within this. We see that once you remove all those toxic metals from those slimes dams they become ideal land for agriculture.

He recalls how the old Johannesburg Consolidate Investments did this in the past with Tavland and grew fantastic fruit, exported it and made a fortune. He also recalls how they had research to actually get rid of acid-mine drainage. That research is still sitting there and needs to now be commercialised. You can turn dumped material into products like gypsum.

Kamwendo: A Turkish powerships company is offering to inject thousands of megawatts of electricity into South Africa at short notice.

Creamer: The short notice is the big thing and we see that these powerships moore in your harbour and link up to your grid and send power in. We saw that Ghana is doing this for 450 MW and signed up with this Turkish powership and by the end of the year they will have 450 MW going into the country.

The same company has come down to South Africa and said you are spending an arm and a leg on diesel, it is ridiculous. The whole world is laughing at us on how much we spend on diesel, it is disproportionate. They are saying that they can give us 500 MW by the end of this year and another 2 000 MW by the end of the next year.

Kamwendo: 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

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