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 lives of hundreds of thousands of people will be impacted negatively if Lonmin Platinum is forced to close; urgent action is needed to save the company.
Creamer: This was the plea from the management of Lonmin Platinum this week, that the deal that they have that could be a savior for this company and when I’m talking 100 000 of people, I am talking about between 200 000 and 300 000 people, would be directly and indirectly affected if this operation seizes.
They are saying on behalf of those people, why don’t the authorities really try and speed up a merger that they have in place with Sibanye, which could change the face of the company. We know that these different corporate entities have always been at each other’s throats, but during this crisis they have realised that you need to come together. If you look at some of the assets of Lonmin and Sibanye-Stillwater they are actually abut there is nothing that separates them except the corporate acrement. They are saying if they can come together they will have synergies, which will be worth R1,5-billion a year.
They have got to clutch at everything they can, because they are skating on thin ice. We know that they kept themselves in a net positive cash position and they have done so for quite a long time. There is a point where they need to grasp at every solution they can, because they are already talking about shedding something like 12 600 jobs over the next three years. If they don’t do this deal it could actually jeopardise 32 000 jobs. So, the majority of jobs need to be saved and I think the Reserve Bank of South Africa needs to be applauded for actually giving the go ahead to this deal between the two companies.
Hopefully the competition authorities won’t hold this up. The problem is that it is not only South African competition authorities, but also those in the UK, because Lonmin is primarily listed in London. So, hopefully the deal will be speeded up, because they can get these synergies going and we know that we need at least R1-billion a month to actually keep going. This is a big operation and we should treat it as a short of an emergency where we look at this and say, let’s go ahead with whatever saves these companies money.
Kamwendo: The short spell of mining hope that South Africa experienced earlier this year have been dashed, Shadow Minerals Minister James Lorimer told Parliament this week.
Creamer: We had the Ramaphoria and the expectation was that some of the ills of the past and decisions that were taken by the previous ministry would quickly be moved away.
There were indications that this would take place, but two events have knocked that out of position. The one is the indication that although we will have a new Charter quite soon the new Charter will be based on the Mining Charter Three, which is a disaster. So, one doesn’t know what is going to come out of that. The uncertainty is still huge.
The second blow was that the courts decided that the idea of once empowered always empowered would be upheld. Now, we know that the Department of Mineral Resources is going to appeal against that decision. Again, you have a blow. The Shadow Minster of Mineral Resources James Lorimer actually turned to the house and said that these companies have got their 26% and more, but there is a time when those BEE partners seek to sell and want to exit and they should be allowed to exit.
When that happens the companies then have to go out and seek another 26% partnership and they have to make sure that they make up the money for that. He turned to the house and said who here can see that that is good, when you are trying to help a hand full of people, but a lot of people are going to be hurt by that. In fact, families are going to be put into more poverty if you do that, because you keep on bringing the horizon of those mines closer to their end, because they are not sufficiently profitable to attract proper investment.
He pleaded for the case of once empowered always empowered, but as we can see there could be a long delay in that decision. These delays keep investors away and where investors are kept away we can see what happens. Gold mining companies some of them are harvesting at the moment. Some of them had said their mine lives where 24 years, but they are cutting that mine life to 5 years, because they haven’t got the money to put into the development that is needed. Everything gets cut back and that is a huge worry.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.