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: Huge concern is growing over the delay of the South African government to approve the second phase of the Lesotho Highlands Water Scheme.

Creamer: This delay is causing concern and even if they take a decision now the water will only come to Gauteng in 2024. Originally the date was 2020. So, is this going to be a repeat of what we did with electricity? Are we going to run in to this problem? It is concerning not only South Africa, but also people from Lesotho. They have asked for a chat with some of the parliamentarians to find out what is going on with this delay.

That is quite an odd thing to do, because obviously they want the portfolio committee to put some pressure on the Minister. That does behove the Minister to go in with a plan to say that this is what the cost will be and then go to the Finance Minister with the consequences. The Cabinet needs to take a decision, because if there is a drought like we are having now, in 2018/2020 there is going to be a shortage of water here.

This has serious implications. The tariff side of it is also important. Start getting people prepared to the rise in tariff for the water. With the first phase of the Lesotho Highlands North Scheme we are talking about the second phase that needs to be given the go ahead. There was no real concern about the tariff because it was gradually brought up and by the time the water came in people were used to the tariff.

This needs to be repeated with the Lesotho Highlands second phase. You have got to get a lot parties and moving parts to get their act together including Rand Water to make sure of these tariffs. This is a tricky treaty which has to be signed. There is a treaty involved between the two countries, but it has been done before.

There is also a situation where Lesotho does the procurement and we pay. There are a lot of things like that that need to be spoken about. These long-term decisions must be taken not only for Gauteng, but also Lesotho and the other provinces that are affected. In Durban, we have that situation towards the north where demand is growing and they are trying to decide if they are going to have this.

There is a lot of water in the Umkomaas river, but do they give a go ahead for a pipeline plus a dam which is quite costly or do they have desalination. If there is a drought that will sure cause tariffs to rocket. The balance of probabilities have got to be weighed up on all these long-term things and decisions have to be taken now otherwise we are going to land up in trouble.

Same with Cape Town, are they going to use that waste water that now goes into the sea or are they going to use the water they discovered through drilling boreholes or desalinate? All these decisions have to be take and proposals must go to the Cabinet. That is the job of the Minister.

Kamwendo: The mining industry has shrunk alarmingly and is now smaller than it was in 1994.

Creamer: The mining industry in the six-months to June have had an aggravated loss of R13-billion. The next six months it looks like its going to lose even more because the prices they have been fetching are down. It has shrunk to a position where it is smaller than in 1994.

This has been put out by the Chamber of Mines of South Africa and again it affects other sectors, because the regulatory framework has been very harsh on the mining industry that they have shrunk and they have got so many commitments now that they don't know whether they are coming or going.

The impact spreads, because it is the flywheel of the economy and feeds the other industry. You get that slowdown going through, yet you get this big opportunity, because you know that mining is essential for the modern world. You pick up your smart phone and you have got all sorts of metals and minerals, copper, platinum, gold and silver in it. If you brush your teeth you need the silica and the phosphate.

There is this huge opportunity and you need a friendlier and enabling environment from government.

Kamwendo: 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.