On-The-Air (10/10/2014)

10th October 2014

By: Martin Creamer

Creamer Media Editor

  

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AMLive anchor Sakina Kamwendo on Friday presented another Update From The Coalface with Martin Creamer, publishing editor of Engineering News and Mining Weekly.


Kamwendo: Modernise or bust – that was the blunt message given to the mining industry at this week’s Joburg Indaba.

Creamer: They are using the word “modernise”, rather than “mechanise” and this was the blunt message that came through early at the Joburg Indaba during the panel discussion that came from none other than the people who have been seriously affected by the five-month strike that we’ve had in the platinum belt, and that is the chairman of Anglo American Platinum, Valli Moosa.  He was saying modernisation now, fundamentally starting with high a degree of mechanisation, and then follow that up with a second step of putting the labour representatives on the board of the company, as they do in Germany where you have a supervisory board, and you have an executive board, and they can bring members of the representatives of labour onto that board and also create an ownership amongst the employees so that they can go to the annual general meetings and ask the questions to the directors, just as all shareholders can do, and thirdly, move decisively against migrant labour for once and for all. As he said, this was just an apartheid mechanism to keep people out of the cities.  Why have the mines kept this? He wants those three steps taken, and, of course, he was attacked and they said, “what about the jobs you are going to lose here if you mechanise to a high degree?” He said, “ we have a moral duty and a legal duty to help those when we reduce our staff numbers”, and he said, “ I would like to call them staff, not employees.  When we’ve got to cut and reduce people, we’ve got a moral obligation and a legal obligation to make sure that they are compensated, that we will do, but we are not going to budge from going into high technology, because it’s akin to people during the Industrial Revolution saying, no we can’t move forward, because we are going to lose jobs.” That has always been the situation, and he’s saying technology is the thing that will drive the biggest growth in South Africa and we’ve got to move forward with it, not only in South Africa, but Southern Africa and Sub-Saharan Africa is going to have technology.

 

Kamwendo: Top global investment bank Goldman Sachs sees positive turnaround for South Africa’s struggling mining sector.

Creamer: This was quite surprising at the Joburg Indaba, because there was have been a lot of negative headlines, so you’d think that fund managers and investment bankers and fund managers would run a mile.  Not one of the biggest in the world, Goldman Sachs International whose Colin Coleman said, “I can see the turning of the tide”.  He used the words I predict more than once, and normally, people don’t predict, they say, “what if”, and they create scenarios, especially investment bankers.  He’s saying, “I’m  predicting a better scenario in South Africa”, because nobody wants the mining sector to stay where it is and we know that the mining sector is the engine of growth and unless you turn that around, you’re not going to around the South African economy, it has to begin with this. He says he is encouraged by the constructive dialogue that is going on at the moment, and he sees that it’s crossing the full spectrum, it’s government, labour, political parties, it’s mining experts, it’s everybody coming into this to create this new way forward and so he’s saying, yes, we have had shocking returns, and he spelt out some shocking returns that shareholders have had, and even Valli Moosa said, “I don’t know why shareholders stay with us. Because, especially the gold shares, return on capital hasn’t, by any stretch of the imagination, even covered the cost of capital in the last ten to twenty years. His figures show that only iron-ore, iron-ore alone beat the cost of capital over the last ten years for investors, so he’s saying, look shareholders have had a raw deal, but we believe that from now on there is going to be a turning of the tide, and a reversal of the problems.

 

Kamwendo: South Africa’s long-awaited amended mining legislation may be on its way back to Parliament.

Creamer: This was the new Minister, Ramahlodi, he actually impressed at the Joburg Indaba. A lot of people remarked on his co-operation, his willingness  to get behind and make sure that we get growth out of this economy, and he’s conscientious.  He’s now saying that that the MPRDA, that’s the Minerals Development Bill, may have to go back to Parliament. The Opposition are demanding that it goes back to Parliament, The President is having to re-look at the Constitution, to see whether in actual fact with the changes that need to be made, it does have to go back to Parliament.  He will know very soon whether that is the case, and also it is being effected, because he as the Minister believes that the oil and gas side of the business should be separated out into different legislation, and decoupled from the mining legislation.

 

Martin Creamer is publishing editor of Engineering News and Mining Weekly. He’ll be back At The Coalface at the same time next Friday.
 

Edited by Creamer Media Reporter

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