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 world’s biggest investment bank – Goldman Sachs – this week gave South Africa a firm thumbs up as a favourable investment destination.

Creamer: This was a speech at the IDC in Sandton and the thumb up was given against the background of what is the biggest number cruncher in the business. Goldman Sachs really have all the data and they know exactly what is going on in South Africa. They know about the energy problems, about the weak growth, about the xenophobia, but despite all that, they gave South Africa a thumbs up for investment and described it as a favourable investment destination.

Of course, it is again the private sector which is coming to South Africa’s rescue. You have the State-owned corporations like Eskom causing trouble, as well as xenophobia, shaky government response to that, but it is the private sector that is seen as the pillar on which a big investment bank like Goldman Sachs can hang its investments. They are likening South Africa now, to the way people regarded China two decades ago, they were skittish. They were scared of coming in saying rather go to China via Australia, you can go in and invest in companies like BHP Billiton that are big in China and that is the way you can do your investment.

People are thinking the same way about South Africa, but Goldman Sachs are saying no, you can come straight in because of the way the Johannesburg Stock Exchange is going at record levels at the moment. It is well managed and governed and our companies have a market capitalisation which is double the countries gross-domestic-product and they see liquidity in that. Also, there is scarcity in the world’s emerging markets. So they are saying, where else do you go?

You can’t go to Latin America at the moment, because it is growing at 0.5%. You can’t go to Brazil, because it is actually growing at -0.6%. You can’t go to Turkey because of the political problems and proximity to the Middle East. Russia is virtually untouchable. Against that background, South Africa looks quite good against many of the other emerging markets. We are fortunate then to have Goldman Sachs giving us support. In fact, their CEO Lloyd Blankfin, will be in Johannesburg next week and will also be speaking. You can see they mean business and they talk about us having that tailwind of 5% growth coming through from Sub-Saharan Africa.

They also say that you earn points when a country like Nigeria has a safe election, it reflects on the continent. So there are plusses they are picking up that makes them say that South Africa is a favarouble investment destination.

Kamwendo: Mechanised mining has been given the thumbs up by labour unions in South Deep gold agreement.

Creamer: If you look at the gold agreement now people are forecasting that this would be the toughest negotiations we’ve had so far in the wage negotiations in the gold industry. Already a decision has come through and it is an acknowledgement of the mechanised mining, because the deal that has come through is for one of the gold companies, which is Gold Fields.

They have struck the deal with the two unions, which are acknowledging that the capital intensity is part of the mining now. The mechanised capital intensity separated from labour intensity coming through and accepting. They accepted a very good deal. They are getting 10% a year for three years. Some people are complaining that it will set off some labour inflation, but what South Deep are saying is that they have got a fully mechanised operation and a skills shortage and the skill shortage is reflecting in this capital-intensive mining must move towards mechanisation.

Gold Fields has separated out from the other five mining companies, AngloGold Ashanti, Evander, Harmony and Sibanye. The five will do their own deal later now. The South Gold deal is already through, that is the mechanised one. The labour intensive one still to come. There are 94 000 people employed in the other five companies, and only 3 500 employed in the South Deep, but, of course, at higher pay and with a 10% a year for the next three years, which is quite a deal to be struck.

Kamwendo: Mining went into orbit this week with the launch of the first demonstration spacecraft.

Creamer: People want to mine in space and they mean business. Among the are some very big names like Larry Page of Google. They have been talking about this since 2012 and what they see is low-hanging fruit from the near-earth asteroids. They see a lot of platinum there and they say the only reasons why Southern African and ourselves have got that platinum is because we were hit by one of these very big asteroids billions of years ago and that created the Bushveld Complex being so rich in platinum.

They have launched their first spacecraft from Cape Carnaveral this week and it is part of a progressive prospecting plan that they have. They have also built all the telescopes that they need and they have got the financial backing. It sounds like a crazy scheme, but it is backed by people, and if you look at the people on the list, you have got to at least give them a chance, because they haven’t made mistakes in the past and they have launched new industries.

We can look forward to a period of people not only mining the seas, which they say is far more difficult as what they are going to do in getting their rockets up and using robots to mine. The metal and mineral which they see as good target is platinum group metals and they say there is more platinum on one asteroid than has been mined in the world so far and it is far easier to mine because it is more consistent in the way it is consolidated.

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.