On-The-Air (17/10/2014)

17th 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: Former Eskom finance director Mick Davis has gathered in R50-billion for investment in South Africa’s hard-hit mining sector.

Creamer: Mick Davis, we knew him from Eskom and Gencor down the road here, which became BHP Billiton. He had a big hand in that and he also built Xstrata from a small Swiss company into one that ended up with a market capitalisation of R500-billion. Then he merged that with Glencore and now he’s in the market again, raising capital and raising expectations, because his timing is absolutely perfect. The bargains are out there and he’s got the cash and that’s what you need at the moment.  He’s looking at many of the investments in South Africa, potential investments, and, of course, he’s also warned us in the past.  He’s given us a big warning in 2010 about water, saying we must really invest in bulk water otherwise it’s going to stop the growth of our economy and he’s also said mines can do the rail, and they can do the energy side, they can even have their own electricity, but they cannot lay on that water.  That’s what government must really work towards, so he sees a potential for Johannesburg to become the centre of capital raising for African mining development, particularly because it’s just a matter of time before the Democratic Republic of Congo becomes the biggest supplier of copper. He’s given us a lot of leads, and you can see he’s enthusiastic with a lot of money now and coming around and looking for investments.


Kamwendo: The University of Pretoria is investing R50-million to revolutionise the design of South African mines.

Creamer: Virtual reality is now the thing. People want to see what they are doing and we see that it adds to a lot of productivity and a lot of safety, so you will have boards of directors now seeing their mine before it’s developed and because scanning technology is so good now, you can virtually scan an underground mine in a matter of weeks and you can actually see your mine in action, you can see all the danger points, you can see what should be done, you can accentuate  the better design to make sure that we get the great return that we should out of these and of course Anglo American’s Kumba Iron Ore has put R18.8-million into this and Pretoria University itself R32-million, but what they’re saying is that it’s for the whole of Africa, they want the whole of Africa to make use of this and they are interested in bringing in about 1 000 students a year.

Kamwendo: Gold and platinum are down, but investors are falling over themselves to put money into diamond mining.

Creamer: We know that gold and platinum are not that doing well, but we can see that investors are having huge success in raising money for diamond mining, because people are looking at the diamond price. It’s gone up 75% in five years, it’s gone up 14% this year alone and although company valuations are low because their companies have low market capitalisations on the stock exchanges, they are able to raise that capital and we have seen billions of rands raised by four diamond companies in the last few weeks.

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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