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: Gold Mining is not investing in enough in itself to sustain the industry in the future

Creamer: Nick Holland, who is the GoldFields CEO, this week gave an account of an in-depth study he has done, saying that gold mining is not investing enough in itself to sustain the industry into the future. Four years ago, he gave a similar speech in Melbourne and he warned about the problems in the gold industry, actually producing too much.  That resulted in a lot of financial metrics coming into line, and financially, the gold mining industry is looking good, and its financial metrics are good, but its orebody metrics are shocking, and we see that it the industry has spent very little on exploration for many years now and it has spent very little on new projects. Hardly any new projects, and we are talking about the global mining industry as a whole.  Now its lack of expenditure is coming back to haunt it, because it looks like there will be a shortage of gold coming through, in the future, and of course that could have an impact on the price, and that would be favorable, but still, the industry is seemingly going to lack physical supply of gold going forward.

Kamwendo: The entrepreneurs seem to be taking advantage of the good rand/gold price to mine more of the gold dumps

Creamer: Decades ago, we had a young entrepreneur, Joe Berardo. He came here from Madeira, and he went past our big mine dumps on his bicycle, and he said, what are these? They said these are dumps.  He said, but is there anything in them? And they said, there is still gold, and he said, still gold? He, as an entrepreneur, then developed an incipient industry that is now manifesting itself on the East Rand and soon do so on the West Rand, but in between, we’ve got a lot of new entrepreneurs now who want to turn these gold tailings dumps into positive account. They want to get the gold out of it, particularly gold, but there’s also uranium and sulphuric acid potential. Reports coming through now, are that people are looking to work gold dump assets again, the project houses are reporting, and particularly entrepreneurs with money that are prepared to invest in gold tailings retreatment projects.  Also, deep down the old measurements that we used to have, the pioneers used to use pennyweight per ton, a lot of people are shaking the dust off those pennyweight per ton plans and saying, let’s do something at depth as well, and we see that the Australians are doing that and actually going to the Stock Exchange raising money and going into the pennyweight per ton areas and actually finding gold, so, that would also be an opportunity at depth.

Kamwendo: According to the Glencore mining group, the tightening supply should bode well for the commodity prices

Creamer: Glencore reported this week and they were talking about the changing atmosphere within the commodities business, how it was over-supplied, but now we see that the supply is starting to tighten and demand is still there.  They were saying that they are still getting good demand from China, and there has never been a demand problem. There has been a problem with over-supply, and now that they are reporting that there is a tightening up of this over-supply, which should have a good impact on the whole mining industry.  They also spoke about South Africa, where there are just no new big coal mines, and that might be a problem for us, because of our huge reliance on coal, and it would be terrible if our exports would be curtailed, which would happen, because we earn a lot of money from that but if there is a coal shortage, South Africa would have to turn some of that coal inward, if it became an emergency situation

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