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On-The-Air (29/01/2016)

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29th January 2016

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: The downsizing of the big Sishen Iron Ore mine in the Northern Cape has put 3 933 jobs at risk.

Creamer: Not good news at Sishen, because this was our prize, it was earning us foreign exchange. In the 2011 year, we know they were making so much money that they created a shareholding for 6 000 workers.

The 6 000 workers that were below management, became half millionaires pre-tax. That is how much money was flying out of that company. It was very good for our rand because it was earning a lot of foreign exchange. Now the complete opposite has happened going from an iron-ore price of a hundred and plenty dollars a ton, we now are below the $50 a ton and it is falling.

This is making Sishen particularly vulnerable because it can not exist at those low iron-ore prices, while the iron-ore mines in Australia can. They can keep going at very low iron-ore price, but we can’t. Our break even is much higher so they have had to do a drastic change to the configuration of the pit.

It is one of our biggest open pits in the country and they will pick the eyes out of that, because they can’t mine volume anymore, because they won’t make money out of it. They can only go for value and when you go for value like that you need fewer people. This could mean that nearly 4 000 people lose their jobs and at the same time we start losing foreign exchange, because there is less iron-ore going out with lower price.

That will impact also State bodies like Transnet that have set up big infrastructure and it could have a knock-on effect on other jobs.

Kamwendo: Against all odds, dogged South Africans have set yet another export record, this time in citrus.

Creamer: This is incredible, because Richards Bay Coal Terminal (RBCT) there is not big demand for coal, but they are going to go the extra mile and make sure they break records and ended up with that record level of 75,3-million tons of coal going out. A similar attitude has come from our citrus community, where they have actually now exported a record 700 000 tons, which is nearly 13% up on the previous year, also against tremendous odds. Not only weather odds and climate odds, but also regulatory odds.

The tough regulations that are laid down by the European Union (EU) cost a lot of money to overcome. In this case it is the citrus black spot. They spent R1-billion trying to overcome that and, of course, the South African’s argued why are they so obsessed with this citrus black spot. It is not on the oranges, it is only on the leaves. The leaves of the citrus trees don't get exported, the oranges get exported.

But, you can’t argue with EU regulations and you have got to conform. This is a R10-billion industry and it had to spend a billion rand to overcome this, but they have done it. It has now put them in an even better position to get into other markets, 40% of the exports went into the EU and there is still scope there for a lot of juices.

We have not got into the agroprocessing side. There could be scope for a lot more to be done. I don’t know why it is but there seems to be a huge demand for lemons at the moment. That could also give us some scope in 2016, which is probably going to be harder then the year we just came out of.

Kamwendo: Champions are needed to further the nation-building messages left by research commentator Robbie Robinson who died last week.

Creamer: Dr RE (Robbie) Robinson, we have mentioned him many times on this programme and although he was 86, he refused to stop commenting. He would use the modern media, the Internet, video and print to make sure that the research that has been done in South Africa is not lost and that someone gathers it up. We can see that one of the big things that he dealt with is acid mine drainage.

That is the polluted water from mines and trying to turn that into positive account. It was quite tragic in the mid 90s he actually got a solution for all this, but the Department of Water Affairs (DWA) the penny didn’t drop. He tendered at Grootvlei where we have had so many problems and it had to close, that mine would probably never have closed if the DWA just accepted his proposal for this polluted mine water, which he was going to clean for the mine, at no cost, create 7 000 jobs for squatter camp people nearby and at the same time, get the finances that you can out of this polluted water.

You get the red iron oxide which is saleable, the nickel oxide and all these things which is saleable and that pays for everything. You think that it falls on deaf ears, but it doesn't. People have taken it up, so he lives on. Just after his death I got this email saying that they have taken Robbie’s basic idea and got it to work, making a profit out of AMD.

So it shows you that even when you are at an advanced stage you must not give up spreading your word, because people will take it up. We know that he felt very strongly about the way we mine.

He felt that the way we blast not only adds to safety problems, but also you leave too much gold and platinum in the ground, because this blasting process is out of control. He always promoted a new way of doing this to get better recoveries and hopefully that will also be taken up by people.

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

 

Edited by Creamer Media Reporter

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