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Feb 24, 2006

On-The-Air (24/02/2006)

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© Reuse this Every Friday morning, SAfm's AMLive's radio anchor John Perlman speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday's At the Coalface transcript:

Perlman: Lack of electricity is a real issue now. All eyes are on Cape Town. But I believe there are potential problems in the aluminium sector as well, and that South Africa might lose some business as a result of power uncertainty.

Creamer: Yes, BHP Billiton, the world's biggest mining company, is ready to roll on two multi-billion expansions on South Africa's east-coast, which has come to be known as the aluminium east-coast, because of what BHP Billiton has developed there in both Kwazulu-Natal and Mozambique. But the reality now is that BHP Billiton is unable to go ahead with new growth investments because of the uncertainty with regards to electricity. Now, aluminium plants are very electricity intensive and will require something like an additional 700 MW of capacity to go ahead on these two projects, one at Mozal III and the other at Hillside III+, but the uncertainty has got them marking time. Also, there are plans to develop the aluminium east-coast even further with another smelter at Coega and there was talk of Alcan, they would require something like 1 300 MW. So, again the lack of long-horizon electricity certainty is holding up our economic growth, potential jobs are being lost now, our exports are being curbed. We saw the same constraints on the coal-line and the iron-ore line, but steps have been taken to get more capacity on those rail lines. Eskom is also coming forward with plans for 5 000 MW of additional electricity by 2011, but because the demand is growing acutely now, lack of power certainty has become an economic constraint.

Perlman: Mining always used to be a man's world, but in the platinum sector some interesting shifts.

Creamer: In the Mining Charter there is a gender-equity requirement and one of the scorecard items is to get a percentage of women into mining. Most of the mining managers that I have spoken to on the women-in-mining issue say that it is their most challenging scorecard item and that it is very difficult to introduce gender equity in mining. I see one exception coming through, though, and that is Impala Platinum, South Africa's and the world's second-biggest platinum company. In the last 18 months, Impala has introduced 570 women miners, increasing the percentage of women from 1 % to 4 % - a fourfold increase over 18 months, and the company is now confident that it can hit its target of having 10 % of the mining workforce, encouraged by the introduction of 570 in 18 months.

Perlman: Opportunities in the aircraft business, we don't often hear about that in regards to South Africa, but something is brewing I believe.

Creamer: South Africa is positioning itself as a global hub for the conversion of passenger aircraft into freighters. This comes against the background of the market demand for freighter aircraft growing faster even than the demand for passenger aircraft. So, South African Airways Technical has tied up with an Israeli company, Israeli Aircraft Industries, which is providing the know-how to SAA Technical. The first aircraft has arrived, a Boeing 737 300, for conversion, which will take about 100 days and thereafter they think they will be able to complete the conversion in about 60 days, to turn a passenger aircraft into a freighter aircraft. Freighter conversion also comes against the background of SAA re-capitalising its fleet and its new Airbuses not requiring immediate maintenance for another 12 months or so. This has provided SAA Technical with capacity and they want to use this to transform the technical division from a cost-centre into a profit centre. They see a big niche for converting passenger aircraft into freighter aircraft. They have got a five year contract with the Israeli company, which is providing the know-how and already 12 people have been sent to Tel Aviv for training and this month should see the start of the first conversion of the first eight aircraft. It is hoped that the five-year contract will become a 10-year contract and that SAA Technical will do many more aircraft conversions, from passenger aircraft into freighter aircraft.

Perlman: We will be watching with a great deal of interest as it unfolds. The man keeping an eye on this and many others is Martin Creamer. 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: Yolande Botes
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