Every Friday morning, SAfm’s AMLive’s radio anchor Krivani Pillay speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly.  Reported here is this Friday’s At the Coalface transcript:

Pillay: The province of KwaZulu-Natal is the lucky recipient of a hat-trick of multi-billion-rand investments.

Creamer: It is great to hear about new investments. KwaZulu-Natal is coming forward for a hat-trick of them. The one is at Mtunzini, a new mine, the other is at Ladysmith, a tyre plant and a coffee plant at Estcourt by Nestle.

But, let me focus on the new mine. That is being done by Tronox, which is listed on the New York Stock Exchange and has invested R3.3-billion in a heavy mineral sands mine, near Mtunzini. Just going there and watching the people’s reaction and seeing how this American company went about this, they got a lot of applause from the people of KwaZulu-Natal, particularly the Premier Senzo Mchunu. He said that they went beyond the normal expectation by keeping more the 200 employees on while they closed the one mine and opened the new one in a period of about 18 months to two years.

What has happened there is that the Hillendale mine has closed and the rehabilitation is fantastic, it looks like a normal sugar cane plantation now. The new mine is sparkling, coming through in a period of drought. The way they are recovering the water is nice to behold. They are almost talking about a net gain of water.

When you go there and see these water guns, you think well the farmers are going to be upset about all this water going to waste, but it is not going to waste at all. It is all recovered and when you get to the residue dam and you get a bit of rain, you actually get a plus water position. That is an important factor in this heavy minerals sands mining. Another point about it is that they are investing through the cycle, which is very good, because most people won’t invest when the commodity price is so badly down.

They have got a situation in the company where they can internalise, so their costs are in rands and their products are going out in dollars, but they have got their own vertical integration. They send through this to their pigment plants in the US, in Holland and in Australia. When they told us about the weak rand dividend that they get it is quite significant. They calculated that they have actually benefited from our low currency to the tune of about $160-million this year. So it shows you how important that can be.

They are talking about additional R1.5-billion investment provided the water situation can be worked out. There are so many aspects to this mine, because 45% of Tronox, is owned by our Exxaro sitting on the Johannesburg Stock Exchange. You know Exxaro is not a normal company, it is controlled by previously disadvantaged South Africans.

So you have a very good spread of investments coming in and benefitting South Africans deeply, but the big effort being made by experienced American companies. That South African company, Exxaro, also owns part of those operations in Holland, the US and Australia, so it is a nice cut-in.

Pillay: South Africa’s Sibanye Gold has board approval to spend nearly R4-billion on its booming gold mines.

Creamer: Sibanye went to Switzerland and to Zurich and they spoke at the Zurich Gold Forum and said things are going well with gold at the moment, in fact, our board has approved R4-billion of additional investment, all in South Africa. A lot of that will go into the West Rand where they have got the Driefontein mine and the Kloof Mine.

They are planning on a lot of billions of rands going in to that to improve their underground infrastructure there. But, it is not only the old mines, there is also a big investment going into the Burnstone mine, which is out on the South Rand. We don’t often hear about that, but Sibanye Gold bought that for a bit of a song when it went into business rescue a couple of years ago and now they are going to put over a billion rand into that as well to get that going.

That is not the end of the story for Sibanye, which is really no longer Sibanye Gold only, but it is going into precious metals in general, because we know it is about to take over control of a lot of platinum mines. Of course, we are just waiting for the State to do the last of the transfer of ownership, everything else is in place.

They will then become a big platinum mine owner. In that space, they are looking to remove the farm fences. Now that is a term we used to use, because when mines where established here, their sizes were determined by the surface and they used to use the surface farm fences to determine what went on underground. It often didn’t make sense, because you would have one mine next to each other and it would have paid them to mine the whole area, but they had to stop underground because they were determined by what was happening on surface.

Because he is buying two companies, one from Anglo American Platinum and another from Aquarius, so he is looking at taking down the farm fences. That always means that you are going to have some synergies, you can make some more money under there. A third thing he is doing is going into his own energy generation, so he doesn’t have that full confidence in Eskom, because when you have got a big underground mine like you do have at Carletonville with Driefontein and Kloof you have got to make sure of your electricity at the right price.

You will see that his new big team of executives and he is snapping up all the top executives, he has John Wallington who is an expert in coal and he is going to have to provide the energy solutions. So a lot happening with Sibanye Gold.

Pillay: A promising new African auto association has been formed to spread manufacturing know-how across the continent.

Creamer: I love this, because Africa needs industrialisation, but it is also hungry for cars and trucks. It is wonderful that the car manufacturers in South Africa, of course, they are part of international groups and you have got Ford, General Motors, BMW, Toyota, Volkswagen, all the rest and Nissan.

They are now looking to Africa. How can they replicate what they are doing in South Africa in Africa? They look at Africa and they see that there is a lot of car and truck manufacture assembly here also in Egypt and Morocco, but nothing on the west and the east. If you go into Kenya the number of second hand cars that they are pulling into that country is something to look at.

They are saying is it ideal that these second hand cars come in and they don't have the best emission control, so let’s do something to create and replicate what we have done in South Africa across Africa. That is through the African Association of Automobile Manufacturers.

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