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

Perlman: South Africa is heading for a national Budget surplus, which is providing opportunities to do all sorts of interesting things. We have talked about the infrastructure, but other things afoot.

Creamer: Yes, South Africa appears to have entered a period of sustained national Budget surpluses and this is presenting a once-in-a-life time opportunity to scale-up social upliftment programmes exponentially. What exactly is a Budget surplus? We are talking here about revenue that the government knows will come in, but has no expenditure plans for that revenue. That is the surplus we are talking about and we saw in the Mid-Term Budget Policy Statement that there will be a surplus of 0,5 % of gross domestic product. That turns into R9,6-billion, so it is a very substantial amount of money. We also know that these projections have up to now tendered to be understated, so it could even overshoot that figure. I think imaginative heads need to be put together now for this once-in-a-lifetime opportunity that will probably persist towards 2010, because although they project deficits next year and the year after, these are smallish deficits, and even if we went into an actual slight deficit in the interest of social upliftment, this is an opportunity the country has never had before, to make sure that South Africans get better public transport and better health care to make sure that our skills upliftment is really meaningful. I mean, there is a unique opportunity and also to get better security against crime. We are going to have the funds and we need to have public-private partnerships put place to make sure that we can engage in exponential social upliftment in the build up to 2010.

Perlman: Martin, things happening out at Coega.

Creamer: A new generation of industrial incentive has been studied by government for several years now. The first of these to come out is now the DEPP incentive. This is the development electricity pricing policy and the first recipient of this is Alcan, the Canadian aluminium producer. Alcan will receive it for the new R19-billion smelter, which it is going to build at Coega. But, let us look at this particular new-generation incentive and the new industrial-policy thinking that is coming through. We see three big elements there, the first is scale because these projects have got to be big and in this case Alcan takes 1 300 MW of the available electricity, which still leaves about two thirds of the megawattage available in DEPP for others to take up. But, also additionality, that is another key principal here that ensures that this project wouldn't have gone ahead had it not been incentivised. It is no good giving incentives for projects that would have come here anyway. With the Coega smelter, South Africa is getting a new addition, something that the country wouldn't have had without DEPP and that is a key part of this new generation of industrial incentivising. The third is reciprocity, those who receive this, Alcan receiving this, must reciprocate in some way. The most important way, and this is stipulated, that there is no price discrimination. Now, we have seen companies come in and benefit from wonderful incentives and then discriminate against South Africans with their pricing and charge South Africans more than they charge their export customers, which then damages our economy and prevents us from going downstream because of the anti-export bias that it inflicts. This pricing is different. This incentive is different and insists on non-discriminatory pricing and also facilitates the downstream activity, where most of the jobs are. We expect the new-generation conditions of scale, additionality and reciprocity to also form part of the next set of incentives that are scheduled to come out in April.

Perlman: From the world of sophisticated policy making to something very basic - sand and stone, unprecedented demand. Are we coping?

Creamer: We are coping, but the South Africa's Aggregate and Sand Producers' Association says they have never been confronted by such a huge wave of demand for sand and stone. This has reached unprecedented heights and demand is just going through the roof, but they say they are coping and they will cope going forward. Though this colossal demand is generated largely by 2010, they believe that it will continue beyond that. They are expanding their capacity, making sure that South Africa has enough aggregate and sand and they are going over the 100-million ton a year production mark from their membership alone. The association is also promising that they will keep their eye on the environmental protection ball and on the health care ball and make sure that there is limited dust and noise. They have re-emphasised their About Face programme, which says that when they leave an area it must look like it was before they got there and include indigenous plants. These are the big things now. With this huge demand, we could suffer quite a lot of environmental degradation. The association is conscious of this, but at the same time making sure that they can provide and serve this massive new market, which is surging ahead.

Perlman: Money in sand and stone. 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.