Feb 15, 2008
Cape Town|Citigroup|Education|Engineering News|Eskom|IST|Merrill Lynch|Mining Weekly|France|South Africa|United States|Electricity|Steel|Steel Rationing|Department Of Education|South African Association Of Consulting Engineers|Felix Fongoqa|Hermann Giliomee|Jeremy Maggs|John Thain|Martin Creamer|Vikram Pandit|Engineering News|Mining Weekly
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Maggs: You say when the going gets tough, in South Africa right now I think it is given and accepted, it’s time to turn to the engineers, who have the wherewithal to engineer our way out of a crisis.
Creamer: When the going gets tough, Jeremy, turn to an engineer. We are not just talking our own book. If you look at the subprime crisis in the US, who have they turned to to solve some of those problems? Well, in the case of Merrill Lynch, which is now embattled, they’ve turned to John Thain, an electrical engineer, of course, also with a lot of financial exposure.
Another subprime offender, Citigroup, who have they turned to to turn things around? To Vikram Pandit, also an electrical engineer, also with a lot of exposure to finance and business. What we say is that this is the job of the engineer. With consulting engineers, things happen. But, not only do we have that reality, but we also have an offer from the South African Association of Consulting Engineers, who say that they want to get involved. When engineers get involved, they get things done.
So, we have this offer from the new head and president of South African Association of Consulting Engineers (Saace) Felix Fongoqa, who says that engineers don’t want to be silent while South Africa agonises and need to get involved. When we talk about involvement here, we need involvement as per Hermann Giliomee, the historian from Cape Town. He is saying that South Africa has gone through crises in the past, and always solved them, but with this particular crisis, he advocates that we don’t do it in an uncoordinated way.
In other words, you need a task team in the centre that looks at one thing and one thing only – that which will benefit South Africa and its people. Then, identify the problems and go for the solutions, which we know mustn’t be uncoordinated. You cannot just go for the power problem at the moment and potential threats to water or only for the fact that we are possibly having steel rationing soon.
You can’t just go for the logistics and rail, it has got to be a holistic solution, and we have also got to try and deal with the impacts in growth that arise on the short-term and also the impacts in growth that arise on the long-term, not excluding Home Affairs and not excluding the vital Education Department elements.
Maggs: : Let’s pick up on that word “solution”, if we can, two giant global engineering groups are stepping up to the plate. Solutions in other words to offer energy-short South Africa new insights particularly as far as the nuclear energy is concerned.
Creamer: You know, South Africa is benefitting from people who are still willing to beat a path to our door and we should take advantage of that. There are two giant global engineering groups in the form of Areva of France and Westinghouse of the US, who are stepping up to the plate to offer us nuclear solutions.
We know that from a long-term baseload point of view, it is either coal or nuclear. We know that coal has its baggage, its CO2 baggage, and they are trying to clean-up their act, but we also know that the FutureGen clean-coal project in the US is now being delayed. Nuclear will have to play its role and the faster the better. These two companies have already put their bids in to what is called Nuclear One.
They have also tied up with local companies, Areva tieing up with Aveng, and Westinghouse of the US tieing up with Murray & Roberts. They are also keen on localisation, creating a local content to all this, which is so important for the job spin-off. Westinghouse has already acquired IST Nuclear, so it has acquired a going concern and renamed it under the Westinghouse banner.
Areva is offering something very interesting at this time, when Eskom is cash-constrained, that is a possible sweetener in the form of one of the components of their team, the French utility EDF, actually being an investor in these nuclear projects. We are looking at 20 000 MW of nuclear power by 2025. We have got the five sites. It’s now decision-making time.
Maggs: Not a good year for South Africa and, goodness knows, its only February, but music to the ears is that there is a mining company announcing that it will have no drop in production, despite of the 10% cut of electricity to mines.
Creamer: Mining companies were almost sounding like a long playing record. Every time they reported, the gold companies would say that they have got to cut their electricity consumption by 10%, and this could translate into an even bigger cut in gold production, maybe bigger than 10%. We would be losing many gold ounces.
The platinum companies began the same litany. They would tell you how many ounces they would be short this year as a result of having to go down to 90% of electricity consumption. Well, it was music to the ears when Northam Platinum came up and surprised the analysts saying that they have got the 10% cut in electricity, but there won’t be any cut in production.
They will keep the production level in the next six months at the same level that it was when they used 100% of electricity. That is the sort of rising to the challenge that we want to see from South Africa’s engineering community. Northam’s engineers are now confident that they won’t have use 107 MW any longer.
They are quite confident that they won’t go beyond 95 MW of power. That sort of attitude, in rising to the occasion and rising to the challenge, will lift our productivity and it’s time for people to show their mettle.
Maggs: 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© Reuse this Comment Guidelines
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