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: The huge global mining company Glencore this week confirmed that it is about to conclude a major oil deal in South Africa.
Creamer: This is fantastic news. Glencore is a very big trading company, it has got more ships then the Royal Navy. It is going to do this deal it seems with Chevron Corporation in South Africa. That means it will take over the business of Chevron. Chevron is a big oil refinery in South Africa and it has also got a huge network of petrol service stations.
This will be a means of going downstream, as they call it, in oil. This Glencore company, which is listing in London and Johannesburg and headed by Ivan Glasenberg, they have oil interests. Now, they also want to go downstream not only in South Africa, but also Botswana. They have already done some in Brazil and Mexico. This is going to help that business and also help South Africa, because we need people to take a keen interest in what is an essential supply and will be an essential supply for a long time.
We also see that Glencore is doing very well as a company. They are streaking ahead of the other big mining companies like BHP Billiton and Rio Tinto. They are having record results after record results. That is also good news for South Africa, because it is showing strong confidence in South Africa’s new political dispensation.
Kamwendo: The black-controlled Royal Bafokeng Platinum this week outlined how heavy-handed laws are not needed to transform mining.
Creamer: They are saying the laws of transformation are pretty heavy-handed in South Africa. It is quite a strong arm from the government that is forcing this transformation. They are saying that is the wrong thing to do, just look at us, we have been transformed through collaboration, friendly collaboration, going over a period of time. We are now listed on the Johannesburg Stock Exchange. We have got a business that is really derisked. This business is ready to fly once the platinum price recovers.
It has not had the implication of one big hammer being put over someone’s head. Anglo American Platinum has worked hand-in-hand with this company over a long period of time getting it listed on the stock exchange. Royal Bafokeng Platinum was a community mining company, small fledgling now regarded as a mid-tier. In time, this will be a major, because you can see that it has already got its own big Styledrift project in the North West, which is derisked. Not only that, it is a mechanised operations so the costs are going to be at least 15% lower than its mine where it doesn’t have mechanisation and that is the Bafokeng Rasimone.
It has got two operations, one as a project coming through and the other giving it regular money into the coffers so that is the ideal way of transforming and allowing South Africans to come in and take control of a business, grow it and not have any heavy-handed laws to force it to do this, but mere collaboration.
Kamwendo: Government was this week urged to play a positive role in limiting the large-scale retrenchments that are looming in platinum mining.
Creamer: The ‘r’ word is haunting us here in South Africa. You see it popping up in civil service and all over the place, but particularly in platinum at the moment it is really scaring everyone in South Africa. One of our big majors, Impala Platinum, which is the second biggest platinum mining company in the world, they have got a new strategy.
They are saying they want to take their 40 000 people down to 27 000 people over two years. That means that there will be a job loss of 13 000. The warning from them is that if they don’t, that in the current circumstance with the very low platinum price, it will threaten the jobs of 40 000. They are saying that government needs to come in and cooperate with them, because if people get retrenched, they don’t pay any tax, for instance. Why not then, if those people are going to stay on, at least the government can come through with a tax credit, which they wouldn’t have got on retrenchment just to make employment a little bit easier.
One thought coming through, there are many thoughts coming through on how people can stay in their jobs by even changing their hours of work. Many ideas coming through but the government needs to sit down with these platinum mining companies that are really going through hell, particularly those who have got the deep and dark mines without mechanisation. They are heading for serious losses and they are warning that this terrible retrenchment could come and South Africa cannot afford it. So, let’s sit down and think about it and come up with innovative solutions.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.