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: South Africa’s ferrochrome producers have surprised on the upside by lifting ferrochrome exports to a new high in difficult circumstances.

Creamer: Isn’t that incredible. We hear every day that China is not importing at the same level. Here they send out 24% more ferrochrome from South Africa to China. When we did that with coal we reported that we had record coal sales. People asked how do these South African’s do it? They say it is Madiba magic. Here is more Madiba magic with record levels going out in ferrochrome.

That is a beautiful word, ferrochrome, because this encapsulates the beneficiation part of South Africa. When you take chrome and you turn it into ferrochrome you add six times the value and you create three times the jobs. This is fantastic and Merafe is the window on this, because they listed on the Johannesburg Stock Exchange led by Zanele Matlala.

They had their cash going through the roof with a 212 % increase in their cash coming through from that. So, significant things happening behind the scenes. They are in partnership with a giant, which is Glencore, it is almost a Glencore proxy when you look at Merafe. They have got 20% of that venture in Mpumalanga. Having a big partner like that really helps because they know the market so well.

Kamwendo: Eskom’s latest electricity price increase nullifies all the cost-cutting done last year by one of South Africa’s biggest mining companies.

Creamer: This is thing, a lot of companies are painfully going out and they are cutting costs and jobs. One of the companies cut 450 managerial jobs and a whole lot of other jobs on the line, because things are so tough.

I am talking about the platinum arena. You think that you have done something and cut the costs and that you are at a better level. But, along comes the power tariff and even at 9.4% and not 16%, Anglo American Platinum says that it just wipes out all the work they did last year. All the costs savings gone that they introduced have been nullified in one fell swoop of electricity tariff increase.

They are now paying R3-billion for less electricity because they cut their usage. They once paid a billion rand, for far more electricity. So every one is coming to the party and Eskom must too. Eskom must go all out to keep tariff increases below inflation. Above-inflation increases must become something of the past going forward.

Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.