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: Black-led mining company Exxaro is negotiating the launch of a Fourth Industrial Revolution technology business with a global know-how partner.
Creamer: It was very interesting, the high flying Standard Bank yesterday said we have got to get abreast with the Fourth Industrial Revolution. While the CEO of the bank was talking, we had Mxolisi Mgojo at the Exxaro results presentation giving about ten minutes to the Fourth Industrial Revolution and how important it was for his mining company to now look beyond mining.
Now, that mining company is doing very well. It pumped cash and it has got a 40-year horizon ahead of it. It has got long-term contracts with Eskom and export of coal. They are saying we must look now at what the disruption possibilities can be. They are saying what are the three big areas where we must study?
Energy and the renewable energy side. Food security and water security. Of course, they have already moved into the renewable energy side and they reported that their two wind farms are now at planned capacity and they want to more in renewable energy, as well as smart renewable energy, so getting to the technology side. Where they are focusing now is in the area of water and food security.
It is not as if they are going to be farmers, they are not going to be planning and ploughing and doing that sort of work. They want to develop the high technology around agriculture and water security so that those farmers that are in there can really move optimally. Now, we know that Exxaro and the mining companies have got a lot of land. We go out there and we see they are underground, but on services there is land galore.
Mgojo who is also the President of the Chamber of Mines at the moment has mentioned in the past that he is mulling the idea of getting near mine communities involved in agriculture there. His second thought that came through yesterday is that Exxaro wants to be the big technology enabler with artificial intelligence.
The idea is that if these people do get involved in farming, they will be at a high level of expertise. We see the thinking now that we mustn’t subject ourselves to being disrupted with a surprise disruption. We must think well ahead and they will be putting a lot of money into mining. They spoke of R13-billion going into coal mining because they have got all these seven projects in Limpopo and Mpumalanga.
What they are looking for now is low capital quick return big technology business with partners that they are going to announce. They said that they have been negotiating at quite a strong level and they were preparing the market for their announcement.
Kamwendo: Germany's tough court ruling against diesel pollution looks like being a blessing in disguise for South Africa's struggling platinum industry.
Creamer: Diesel, which is so important to South Africa’s platinum, has become a pariah, and it started in 2015 when Volkswagen cheated on the emissions. It has just gone from bad to worse. We see now that cities around the world Paris, Madrid, Mexico City, Athens and even Copenhagen next year want to ban diesel.
Now, this German court ruling where the Federal Court has given permission to the cities to ban diesel. Diesel and Germany have been synonymous. They have produced the best engine you can imagine. Platinum is now saying that these guys have to form an alliance to make sure that this demonisation of diesel is put into proper perspective, because with platinum we can make sure that diesel becomes an angel.
What they are saying is that this could be a blessing in disguise and this was the point made by Steve Phiri the CEO of Royal Bafokeng Platinum. He spent quite a lot of time telling his investors about this German ruling and how it can be turned around and how they have been working behind the scenes with the World Platinum Investment Council and a whole lot of alliances in the auto industry to present solutions. One of these solutions is putting in a retrofitting. We know that the diesel cars have been loved in Europe so there are a lot of people driving around in these cars.
All of a sudden the court says they are going to ban these vehicles, so how are they going to sell them, mark them up and what is their value. What RBPlat is saying now is that they can give them a retrofitting to put onto the car and test it by the German equivalent by the South African Bureau of Standards and they will say that the past the test of the 8mg per kilogram test.
We see that this could also be good for platinum going forward and that is why Steve Phiri made this point is that there is likely in Euro 6 now higher platinum loadings because they know if they do that platinum has always got rid of the CO2
going into the atmosphere. Now it can also deal with nitrogen oxide. The NOx issue has become a very big issue and this is what they are hoping to deal with for the benefit of South Africa’s platinum.
Kamwendo: Palladium has been given a new name. It's being called 'unobtainium' because car makers can't get their hands on the anti-pollution metal.
Creamer: This is all linked to the diesel becoming the pariah. So what people have done is said that they can’t get diesel, because they are going to run in emission trouble, so they run to what they call gasoline, we know them as petrol vehicles. What do they then use? They take on what was the lower cost palladium.
Now what has happened with all this demonisation of diesel, platinum price has fallen below $950 per ounce, which means that palladium which isn’t as good as platinum has become unobtainium. They can’t get hold of it anymore. Of course, rhodium could go the same way because they use that for the NOx. People are saying we can give you platinum, we can solve the problem at a low cost now.
The thinking is that platinum will actually start replacing that palladium unobtainium and also perhaps deal with the rhodium issue, which might be in the same situation to became the next palladium.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.