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: Successful new gold mining technology is being tipped as the game changer for the entire South African mining industry and not just gold.

Creamer: Yes, not just gold or platinum, but anything with ore bodies like AngloGold Ashanti has been working this one and they have been very happy with the pilot test that went through at their Tau Tona Gold Mine. Up to now, they have been cautiously optimistic about this technology but this technology is rolling out now and they calling it a game changer and something that could be migrated, not only across their own company but also into South African industry space, which desperately needs a technology of this kind because we are going deeper and its getting more dangerous. The safety factor out of this is crucial – not only is it a continuous mining system but it’s blast-free, so you don’t have that whole shaking-up of the rock system and affecting the seismicity and adding to the danger. It takes people out of those vulnerable areas and it brings in this modern technology that is proven it can bore through rocks, is able to backfill and let Mother Nature think that nothing has been taken out. The beauty of it is it goes round 24 hours a day and it can do 365 days a year and we haven’t had that sort of paradigm in our mining industry and as we get deep we need that and the beauty of it is that it takes the gold and only the gold, or the platinum and only the platinum – there is no dilution, so the grades are mouth-watering.

Gwala: The new mine development fund, Martin, that turns black emerging miners into controlling shareholders, is expected to be operational by February?

Creamer: Yes, I am glad that the Public Enterprises Minister Malusi Gigaba has told Parliament that, in this financial year, we will have this mining development fund because there is quite a bit of urgency attached to this and, of course, it is part of this thrust by the Public Enterprises Minister to involve all of his 10 enterprises in developing industrialisation and bringing people into the system, particularly at the sharp end when it comes to Eskom, which will spend something like R200-billion in the next five years on coal. In the run up to 2050, Eskom is going to buy 4-billion tons of coal and it wants at least a billion tons to come from black owned enterprises. We’re not talking about 26% here; we’re talking about 50 plus 1, so no longer co-piloted, but black-piloted projects, and that’s why you need this development fund and its going to need unyielding political will because this is not going to be an easy thing. The developmental finance institutions are going to have to come forward with the private sector but they looking, before the end of the year, to be able to fund exploration activity by black-controlled enterprises that firm up coal supplies for Eskom, which is desperately needing coal. From 2018 there is going to be an urgent need from Eskom so they want to work on a project basis ahead of this fund coming through so they can be ready because it’s important that they hit the ground running. Then there’s also Transnet, which will work together with Eskom, because Transnet also needs to help the coal situation and help these coal miners because they need to export as well, so you can see Eskom getting some allocation at the port for coal exporting. So it’s all being coordinated under the public enterprises umbrella and they want to bring in industrialisation, of course into Transnet and wherever they can. Denel, Broadband Infraco and Pebble Bell Modular Reactors are other state-owned companies to which the same model can be applied want to use this model.

Gwala: It was interesting on Tuesday because I had all three – Minister Malusi Gigaba, Brian Dames from Eskom as well as Brian Molefe on the Forum at 8 and Malusi on his own identified political will as a big issue and he went on to say “I have lots of that” and he is willing to deal with this mine development fund issue immediately.

Gwala: Physical gold demand – demand for gold coins, gold bars and gold jewellery, is soaring to potentially record levels, boosted by currency turbo-charging.

Creamer: This is the irony of the whole situation – we have speculators playing the future of the market and have pushed out gold unbelievably and if you look at the price of $1 374 / oz, you think that this just doesn’t stack up because on the consumer side people are falling over themselves in both the East and even in parts of the West, to get their hands on physical gold – yet it doesn’t have an impact on the price. So you have futures speculators disproportionately pushing down the price. You know those gold ETFs that got sold off with such a pace have severely damaged the sentiment to gold with the futures markets being played in the way that it has been, gold can’t come back, even though the speculation represents a small fraction. If you look at all the gold on surface plus the normal purchase of ETFs, it’s only about 1.5% of that physical gold. But it has a major, disproportional, impact and, at the same time, we see people saying “wow the currencies are in our favour – we’re going to go and get our hands on coins and bars and jewellery,’ and we’re going to see record sales there.

Gwala: A very complicated one there, Martin. Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back At the Coal-Face at the same time next Friday.