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On-The-Air (12/12/2014)

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12th December 2014

  

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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: Last time we are speaking for this year as well.

Creamer: Till the 16th of January.

Kamwendo: Two South Africans are stimulating the big new surge in world ruby, emerald and coloured gemstone sales.

Creamer: Until the 1940s, rubies, emeralds and coloured gemstones used to run neck and neck with diamonds. But, because of inconsistent and erratic supply, diamonds kept going very well but rubies, emeralds and other coloured gemstones fell back. This caught the attention of some young South Africans, one of them being Ian Harebottle – we know him from these parts as he used to go to Germiston high school. The other, Shaun Gilbertson, also from these parts. They have now raked in nearly $1-billion in the last two auctions that they have had in rubies. These rubies and emeralds come from Southern African. They are right on our doorstep, they mine the rubies in Mozambique, they mine the emeralds in Zambia. They are not only miners, they are marketers, and this has created a fantastic ambience.

Their latest big auction in Singapore attracted 50 companies and generated revenue, as I say, of nearly half a billion rand. That follows their one in June, also in Singapore, which fetched nearly $400-million. We can see that there is a comeback in these gemstones and it is all part of the marketing as well.

Part of this company listed in London, Gemfields, which is on the London Stock Exchange, is Fabergé. Fabergé has a long history of luxury gemstone and coloured gemstone marketing activity. That is why we noticed that at the latest Oscars, we saw people walking across with beautiful emeralds. Those emeralds were from Southern Africa – from Kagem, in Zambia, courtesy of this big marketing and mining thrust by these two young South Africans who are from these parts.

Kamwendo: South African coal miners are way behind their Australian counterparts on the productivity front.

Creamer: The CEO of Anglo American drew strong attention to it this week during the media conferences around the investor day for Anglo in London. As he spoke to us on the phone he mentioned that, again, the productivity levels of coal mining in his group are way behind those of Australia – even more then 50% behind.

Coal is so vital to us, we are sitting here courtesy of coal, the lights are on, we know that even when we pull in at the petrol pumps, we get that fuel, petrol and diesel in chemicals from coal in Sasol. It should not be that we are not productive in these. We have seen what has happened with other mines in Anglo American stable that are not productive. We see with the platinum now that they are packaging it together and they are disposing them. Not only are they deep, dark and dangerous but they are labour-intensive and high-cost. We don’t want that sort of attitude adopted by these big multinationals with our coal assets. We see that, eventually, they start wanting to dispose of these. They hinted during the media conference now that they are cutting off some of the non-performing ones in Australia. They are also talking about, possibly ­– but it is very early stage – but the indication was that there may be some disposals here. We don't like that atmosphere, particularly around coal, which is so vitally important to us. Ninety per cent of our energy comes from coal and 30% of the petrol and fuel we get comes from coal.

Kamwendo: Oversupply is killing commodity prices and putting mining operations at risk.

Creamer: We are in a mining territory here, it is the flywheel of our economy and we shoot ourselves in the foot often in this industry by actually oversupplying. That point was made very vigorously by Glencore Investor Day and shared in the media conference with us. Look at the metals and minerals that haven’t actually oversupplied. Their prices are up, so they don’t say demand is down. Demand is there because, look at the prices of nickel, aluminium and zinc ­– they have gone up. There is demand, so you have to differentiate between the various commodities and which commodities are down – iron-ore, oil, gas, and shale oil has hit the oil price. Iron-ore has just been a complete oversupply by the Australians, pushing the price down as a result.

Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back with us on January 16, 2015.

 

Edited by Creamer Media Reporter

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