06/09/2013 (On-The-Air)

6th September 2013

By: Martin Creamer

Creamer Media Editor

  

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

Makwetla: The current crisis in the South African mining sector is presenting an opportunity for a major industry sea change.

Creamer: There could be a sea change now in the mining industry. A lot of people are talking about it, because you can’t actually expect minimally educated people to go on mining these very complex ore bodies that are getting deeper and deeper. 

People are saying that if we want different outputs you have got to have different inputs. It is now time to marry technology and upskill the workforce to different levels. There has been a call for that even from different unions. What are these FET colleges all about? Can’t our people go into those so that their skills are at least migratable.

At the moment if they get fired they can’t go anywhere.  So the whole idea now is that we should start looking at what is done in other countries. We are not the only country that is mining complex ore bodies at depth, there is also Canada and Australia.  There has been a lot of mechanisation there and we need to look at our own research.

There has been a lot of our research that has been piling up. We have fallen behind on the research, but we have research that has been pilling up since the seventies. We must go back and shake some of the dust off that and see what we can do, because just with one of them that has been uncovered there we have seen that it can transform the hard-rock industry.

We know that AngloGold Ashanti took most of the research done in the seventies and it has converted it into what it calls the new South African technology, which mines all the gold, only the gold, all the time safely. It doesn’t mean that you reduce you workforce, because this will initially be used in areas where we are not mining to do pillar mining.

Then there is the CSIR offering a robotic solution, not only in safety, but also eventually in mining in our narrow reefs. We are heading for a sea change, a paradigm shift hoping that out of this crisis will come something good.

Makwetla: A top South African company is to beneficiate locally mined manganese in Malaysia – and not in South Africa – because it does not make business sense to beneficiate it in this country.

Creamer: This is an interesting thing, we have had Assmang beneficiating our fantastic manganese for decades now, they do that in Cato Manor in KwaZulu Natal. Their major partner is Patrice Motsepe’s African Rainbow Minerals (ARM). They have announced that they are now going to beneficiate our fantastic manganese in Malaysia.

They are going to put a lot of money in to that plant. They are going to be in partnership with the Chinese and Japanese. You say to them why don’t you do it in South Africa, you have been doing it for so long and they say that it is because of the power situation.

Power supply is too expensive and not available. So we they are going to move now with a new 160 000 ton a year project, a R3,3-billion project in Malaysia, because they have been guaranteed electricity supply is at a good cost. Already the electricity prices there are lower then ours by about 12% and then they have got a guaranteed 2,5% escalation going forward over the next 16 years. But, the question is do we have to do this? 

We know just down the road their competitor Samancor Manganese is doing just the opposite. It is saying that they are going to beneficiate more in Meyerton. It has done a fantastic uplift for the area there.

Why are they able to do it? Because, they are producing their own power. A business case is now being presented for companies to generate their own power and this could keep them in South Africa. 

This particular Samancor Manganese case they are generating the power much lower in cost terms then Eskom. In fact, they are talking about 1 cent per kilowatt hour, which is an absolute give away when you think that Eskom is up to 60 center per kilowatt hour.

We are saying that there is a way of doing this, but you need to have your own power.

Makwetla: South African platinum company Implats is initiating legal proceedings in the United States to recover hundreds of millions of rands owed to it.

Creamer: We have got problems of unrest in the platinum belt, but you have also got people not paying the platinum belt companies for work they have done.

You now have got Implats, South Africa’s second biggest platinum company, next week will initiate court proceedings against US recycler for more then a R1-billion. It hasn’t been paid and they have been dealing with Implats for a long time, but got into trouble when the world also ran into trouble in 2008 and now has reached such a speed wobble that its owing the company money.

The filing has been made in a Pennsylvania court. On Tuesday, September 10, they sit down to hear this case and the South Africans want to get their billion back.

Makwetla: 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.

 

Edited by Creamer Media Reporter

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