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On-The-Air (16/01/2015)

safm16jan2015

16th January 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: Cash-strapped junior mining companies are going bust – left, right and centre.

Creamer: They are short of funds and we saw two more go under, both of them in coal. These junior mining companies preform quite a role, they do the hard yards, they get risk capital, often not raised in South Africa. Two that went under this week, both coal companies, both operating in Southern Africa, did not raise their capital in South Africa. Zyl Coal, which operates in KwaZulu-Natal and Mpumalanga, raised their capital in Australia.

Then Beacon Hill, which was active in Mozambique, raised it on the London Stock Exchange. You see that they had to tell these exchanges this week that they cannot pay their debts, in fact they are in default and they have to go into administration. Late last year we saw an antimony and gold mining company from South Africa operating in Limpopo going into business rescue. That is a new thing we are seeing in South Africa, before going in to liquidation they try to rescue them. We hope that something can be done for Cons Murch, which is in Limpopo. Latish last year we also had Marinda Coal go under.

So we see a lot of angst in the junior coal market, which is going to play out later, because these are the companies that firm up the resources. They do all the early hard yards and we see that countries, like Australia are also afflicted by this, particularly Western Australia government have taken steps to help these juniors because they know how important they are. What they have done is they have said that they can halve the royalty due to the government and defer it to a later stage.

Now royalties are horrible things because you have to pay those whether you are making a profit or not. You can see that the Australian government is quite cognisant of that and is saying to these junior iron-ore companies where the iron ore price is really slammed the economy of Western Australia, it employs something like 61 000 people, they are saying that they will try and help them through this period, but they are not letting them off.

They will have to pay them later. You can see that this is an important sector and also you can see that the commodity prices are down. You can be the best manager in the world but you won’t get backing from the shareholders or the banks when these commodity prices are down.

Kamwendo: 130 000 former mineworkers have now come forward to claim unpaid employee benefits.

Creamer: Ex-mineworkers is owed provident and pension fund are coming forward in droves still. We started this in May last year with 5 000. Teba, which is the big mineworkers services company they report that 130 000 former mineworkers have either now walked through their doors or phoned in or their beneficiaries have applied for these benefits.

No one is contesting that they amount to R5-billion, which is a lot of money. It seems like something that could actually try and eradicate some of the rural poverty we have. The big problem is that the payout is slow and the details are only being worked out now. We see only about 400 people in pole position to get paid out even at this stage because of the paper work that has to be done.

Also, one had to work out who is going to pay for tracing costs. There is a change in the legislation, which allows for interests that has been accruing to cover for that. It seems that Teba will definitely not charge any of the beneficiaries or ex-mineworkers a cent. They will get their costs from the mines.

There is also a big change now we see in the people working in the mining industry where the demographics are changing. Not so many from foreign countries anymore.

Kamwendo: Cashless home loans are now on the way for migrant mineworkers.

Creamer: Distant mineworkers can now benefit from what they call cashless home loans. Prioritised at the moment are near-mine communities. There you see fantastic homes going up for them, but really our mines have been built on people coming from distant areas, from far-flung areas like Eastern Cape and KwaZulu-Natal. Its far more difficult to actually help them with housing there, because they don’t have security of tenure.

The ownership of the land is often communal so it is a problem. What they have done is that they have overcome this by what they call cashless home loans, which are now rolling out. They deliver the building materials to your site, so that you can either build a new home or renovate your home. In that way they get this benefit to you. As people are going through the Mining Charter, the audit is now taking place, they see that there are a lot of shortcomings when it comes to people coming in from distances.

What is being really prioritised at the moment are the host communities around the mines. They are getting all the attention and people say in order to comply now with the Mining Charter they are going to have to do something more for migrant labours.

They are trying to make this whole migrant labour system more modernised getting people home more. With these cashless home loans, they can get a benefit of building their own home and have something similar that happens to near-mine communities.

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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