Every Friday, SAfm’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 big new Indian shareholder in Anglo American is calling on the London-listed company to accentuate its South Africa link.
Creamer: Eight years ago Anglo American walked away from its valuable zinc assets in the Northern Cape, Namibia and Ireland. In came Anil Argawal. He is a big zinc miner in India and he bought these assets. He was decisive about the mining that he paid for those assets in a mere two years.
He then started looking around in South Africa and he has fallen in love with South Africa. He thinks that it is a fantastic investment destination. Now that he has got 21% of Anglo American, which is more than the former holding of the Oppenheimer family, he is saying to them, ‘flaunt your South Africanism, make sure people know you are South African’.
Do not dispose of those assets that you were earmarking for possible sale in iron-ore, manganese and elsewhere. Retain them and let’s build on this South African base. He assures us that what Anglo is going to do in South Africa and Africa is going to make us very proud of them. In the meantime, he is also giving a lot of work to South Africans in India. He has given $400-million worth of contracts to South African companies and he says again, believe me this is not sentimental, they cost me half of what the Australians do.
Kamwendo: Africa’s most successful gold mining company this week warned that gold mining is running the risk of becoming an irrelevant investment destination.
Creamer: To investors, Randgold Resources CEO Dr Mark Bristow says gold investment is becoming irrelevant. He says if you invest in gold itself, you can make more than you do out of investing in companies that mine the gold.
So, he is saying gold is now trapped from a gold mining point of view in a very narrow range. The time is right now for consolidation to take place in gold mining in the same way as consolidation took place in base metals and oil and gas, which brought in a much better attitude from investors, because at least they were starting to get a return.
It also brought in better management, which in turn gave better investment prospects. He is saying that now that he can look around having built himself in Africa – we know that Randgold Resources has been the exception in all these gold mining activities, it always does very well, it was conceived here Johannesburg and has five mines in Africa built from scratch – he now has the confidence to look worldwide, particularly to the Americas, for consolidation opportunities so that they can give more relevance to gold mining, which he says in in danger of becoming an irrelevant investment destination for the investor community.
Kamwendo: Mapungubwe head Joel Netshitenzhe has outlined the route to South African mining sunrise in his new book on The Political Economy of Mining in South Africa.
Creamer: This executive director for the Mapungubwe Institute for Strategic Reflection is saying that the sun can shine again in mining.
He is proposing, as we also saw recently from Dan Moagi and Dr John Bristow, who put out a document as independent consultants, is how to get sunrise back into mining. Netshtenzhe now has a proposal to correct all the historical injustice, create demographic balance and the proper ownership spectrum within the mining industry where he also sees possible supply chain black industrialisation spin-offs.
Also, agricultural potential because of all the land that is held by the mining industry. This is Joel Netshitenzhe, an ANC NEC member, an executive director of the Mapungubwe Institute. How can we look better than the Mapungubwe Kingdom, because we now have this historically named institute trying to rekindle our mining in a balanced, correct and holistic manner.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.