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

Kamwendo: The risk of investing in mining in South Africa has been heightened by allegations made this week in the Public Protector’s report on State Capture.

Creamer: This is very concerning. The observations made in that report have ones’ hair standing on end and definitely need to be thoroughly interrogated and investigated. We do hear that people have not been given a chance to reply. There was a major press conference yesterday, they could have replied immediately, there is always a chance to reply. Did these things happen or did they not happen? It is yes or no.

There are so many hard details there that they are so easy to respond to. If State entities are engaging in what has been observed there, they must be called to account. I think that they need to be called to account perhaps faster than just through a judicial commission of enquiry. They need to take out ads or they need to come on to media to say whether this is correct or not correct, because it is too serious to leave for 198 days.

I think that urgent application should be bought demanding is this correct. Did you give a pre-payment of nearly R1-billion? How can you treat the State-owned organisation as your own fiefdom? Who gave you that? This was not cost-plus mine, so why are you applying cost-plus type of criteria to it? We see that it is deeply involved in coal here.

The whole integrity of our regulatory framework is just being punctured very seriously, which will put investors off for a long time. They don’t recover from these things, the uncertainty that this will create. Now they want additional time to reply. They already say that they have given boxes of information. You don't give thirteen big boxes, you give short replies. These require short replies. They are very firm observations, say yes or no.

We have been involved, as a publication, in the early stages of this Optimum Coal saga and we know what was on offer there. I think, if it had been studied carefully, we might not have had this problem now. What Optimum was saying is instead of exporting coal they will take the coal that they were exporting and give it in to Eskom.

Optimum had processing capacity and would have washed the coal to Eskom quality, but because it has got a higher heat value and it actually gives less downtime. Optimum would lift it’s price accordingly. It could have been something that could have been negotiated or otherwise dealt with in a way that was more transparent. We need a lot more transparency in this country.

The whole demeanor of the Department of Mineral Resources (DMR), that they can just go forward and take irregular decisions on rehabilitation money, is wrong. This money is normally locked up, because you have got to rehabilitate what you have done to the earth. So, that money is sacrosanct. You can’t have it floating around like it is now. You can’t have the integrity of the DMR remain when permission is given without a public announcement that you can take large sums of money and let them move into different bank accounts from one to the other.

We know that there is going to come a time when that money will be needed for rehabilitation. Is that money going to be there? I believe we need full transparency now, we need all this rehabilitation money put on the Internet for the public to know where it is, who is responsible for it and what is happening to the interest.

Kamwendo: I think what we need is that commission of enquiry to get to the bottom of all of this, because Brian Molefe also had pains to explain yesterday that this was by no means something peculiar, saying that they have done this before and it is something that Eskom generally seems to do.

So clearly there is a lot that needs to be interrogated, a lot of information that still needs to come to the fore. But, of course, it has been said forever and a day, Martin, that there has to be greater investigation also into the mining sector and what goes on in that sector and how South Africa gets to benefit from all of this. The Mining Charter gets flouted left right and centre, no repercussions. There is a lot going on here and I think we perhaps do need that investigation more than some of us think we do.

Creamer: In the meantime, I think the Chamber of Mines, as it said yesterday, should go for an urgent meeting with the President and the DMR to say that they want their integrity. The impugning of their integrity has got to end.  Where does the DMR stand? There have been so many changes of people there. You can’t have a Minister flying irregularly to Switzerland to do certain deals.

Who is accountable for all this? They have got to bring this into the open. I think it is important to have a commission of enquiry, but commissions of enquiry can take a long time and people can drag them on.  We know that with the Marikana commission it went on and on way beyond what it was supposed to do.

We can’t afford this to happen. I think the Chamber is correct. They need an urgent meeting now and they want this integrity of the DMR to be fixed now. It is no good letting it be passed on and on, because mining is cyclical. Now things are down, you need to take the opportunity to get investors in and that is not going to happen against the background of this Public Protector’s report.

Kamwendo: This week’s passing of a new Minerals Bill by Parliament has again failed to de-risk mining investment, as was the case two and a half years ago.

Creamer: No one is putting South Africa’s interests first. It is all fractional interest, private interests and irregular interests being put ahead. You must give credit to the President. He did send this Bill back on the grounds that it didn’t quite have constitutional muster. It seemed like it wouldn’t pass the constitutional test.

But it has been languishing for two and a half years. They bring it back to Parliament, you would think it would have been fixed. They twiddle and tweak with little things and push it through again. It hasn’t derisked mining investment. Now, you have got a situation where everyone is pinning hopes that the National Council of Provinces will fix it. It shouldn’t be up to the National Council of Provinces and regulations to fix these things.

It should be fixed in the legislation right away. At least one big thing came up, as has been pointed out by James Lorimer the Shadow Minister of Mineral Resources, and it was raised by the House of Traditional Leaders. They said please let’s make mining licensing transparent. Let an independent body do it, like it happens in Chile and other countries. This opacity around the awarding of licenses and the darkness cannot go on.

Kamwendo: Strong new calls to put an end to mine disasters are being made on the eve of the first anniversary of last year’s horrific mining tragedy in Brazil.

Creamer: Tomorrow is the first anniversary of that and that is where the mining industry has to look at itself in the mirror. We had a disaster, now Brazil had a disaster and they need to have an auditing of these sludge dumps. We can’t have sludge slides killing people and mine mud flooding people’s houses. That has got to end. They must come up with audits. Like they audit financially, they must audit mine waste dumps too.

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