Every Friday morning, SAfm’s AMLive’s radio anchor Xolani Gwala speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Gwala: South Africa’s Square Kilometre Array (SKA) is calling on computer giant IBM to build a research laboratory in South Africa.
Creamer: This just shows you the spin-off from a scientific project like the SKA radio telescope. Not only are there going to be 3 000 satellite dishes the size of three story buildings mainly in our Karoo but also spread over into Africa, Ghana and Kenya, there is also possibly a new foundation being laid for computing, because this is really big numbers that are crunched and they need to do it at high speed and low power.
That is why a collaborative effort is now being formed between Astron of the Netherlands along with IBM Group of the US, looking into this. IBM a private sector partner. So you’ve got this public-private partnership going on with some interesting spin-offs because from studying the history of the universe, how the first stars where formed, the big data aspect of this and the processing is leading to a whole new set of engineering and engineers coming in.
We also see people studying astronomy for the first time in countries like Ghana, Mauritius and Madagascar. Dr Bernie Fanaroff has been the champion of all this and really deserves a bow. It shows you how you need a champion to actually lead things from the initial concept all the way through to implementation, which is now taking place.
Gwala: Africa’s iron-ore resources have the potential to be richer than Australia’s renowned Pilbara treasure trove.
Creamer: They say Australia’s economy rides on the red rocks of the Pilbara. Now we are seeing a Pilbara look-alike in Africa and, of course, South Africans are usually the last to recognise this.
The note coming out from analysts in London is that Cameroon, Republic of Congo and the Gabon region is really the new Pilbara of Africa, that is what people are saying. It needs a champion and just like we saw, Andrew Forest, the son of a missionary, in Western Australia leading the charge to gather companies, government, finances and end-users. You need the same thing in Africa now to get that potential.
The Johannesburg Stock Exchange should be the financier of this. We should be looking now far ahead because the potential coming out of this region everybody is recognising it now. It shouldn’t be each company for itself anymore, because that was the mistake of the Pilbara, with the likes of Rio Tinto and BHP Billiton. That is how you don’t do it. There needs to be a lot of collaboration early and that leads to lower costs and more efficiency. We know that this mineral supercycle is really resting between courses it’s had its hors d’oeuvre and the next is going to be the main meal, which is going to be far bigger.
But it is probably going to be different because people are going to want lower prices, more efficiency and this is what will be the best thing that can happen in a region like this. There is a lot of cooperation and we know that our own Sipho Nkosi with Xstr Resouces is there in the Republic of Congo.
The name Glencore is popping up and being suggested as a possible champion and, of course, you know the CEO Ivan Glasenberg is from these parts, he was born here and is also linked to Xstrata, which is active to iron-ore in the regions as well.
Gwala: A study just published puts to loss to Zambia of nationalising its copper mines in the Seventies at a whopping R400-billion-plus.
Creamer: This sort of loss of opportunity is something that characterised Africa in the 70s, going in those 40 years from 1970 to 2010, as this study shows. We have lost so much through bad policies and State-centric policy. The lesson is that we have got to avoid these because it just perpetuates poverty.
When you see the opportunities lost in Zambia through nationalisation of its mines just on the copper side is $45-billion. They actually just looking at Zambia in 1969 at the time that it nationalised, it was producing 700 000 tons. Instead of getting $65-billion it ended up with $15-billion in a declining situation.
We know see former South African companies like Anglo American now going back in there. It is such a tragedy that they weren’t allowed to continue. It was only government policies that frightened them away. A country can be mineral rich but it can be mining poor and you have to have the right policies.
This study is just an indication, being done by Claude Baissac from Eunomix. Zambia is just one of the case studies, but it is the same story for Liberia, Democratic Republic of Congo. It is a massive opportunity loss in Africa through bad policies and a lesson has to be learnt, because the continent is dependent on its minerals for its future growth.
There is a lot being spoken about Africa and it looks like its potential is good, but if people are going to become to State-centric again, the continent could loose out once more.
Gwala: 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.