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: Coal exporters can look forward to faster turnaround times at the Richards Bay Coal Terminal (RBCT), following the commissioning of a brand new suite of equipment.
Creamer: The RBCT earns a lot of foreign exchange for South Africa and we know we are in desperate need of foreign exchange to keep this economy going. Coal at the moment is the biggest export revenue earner. It is fantastic news that they put in a suite of new equipment there. It was a lot of high activity yesterday as they clicked all these things together and it fell into place and went centre stage without a hitch. It has not stopped their normal pace of coal being exported while they brought in new equipment.
So, that is a great feat for them. Also, you can see that they are giving a lot of precedence to the operators. The operator now of this equipment gets to have quite a comfortable lifestyle, much more comfortable then in the past. Besides fancy seats there is also operator friendliness in the form of fridges, microwaves, kettles that can keep these people happy while they are exporting our coal. Very good move indeed. You know the terminal is a private sector terminal, it is not owned by the State, it works with the State port authorities and Transnet.
In between is this private sector business and it is owned by the coal miners, who export the coal. Importantly it is nearly 30% black owned and more then 6% black women owned. It was interesting to see that although all the orders for the new equipment were placed in South Africa, the actual building of this equipment took place in China. It was reported there in order to keep the continuity going and the knowledge factor going, we had engineers and also a black woman engineer spend six months in China so that they could absorb what needs to be done. A lot of interesting activity out at the RBCT, always reporting award winning results and benchmarking against the best in the world.
Kamwendo: South Africa’s secretive Department of Mineral Resources (DMR) needs to subject itself to independent transparency evaluation and to set reform priorities.
Creamer: I think we spent to two decades as a newspaper and publication pleading with the DMR to be more transparent, that when they provide some sort of mineral right to a concern that they could just announce that. It would be the easiest thing in the world to announce the rights that you have awarded. I think that is the biggest safeguard against corruption.
The new Minerals Resources Minister Gwede Mantashe has acknowledged that there was a high level of corruption at the DMR and they are trying to restructure there and do things properly. They can be helped by many institutions in the world that are prepared to come out and benchmark you as a transparency operator. One of the is the Extractive Industry Transparency Initiative (EITI).
They do that throughout the world. South Africa has regarded itself as being above that and allowed other African countries to subject themselves to EITI. It has been at our peril. It is much better to bring in EITI and institutions like the Natural Resource Governance Institute to come and tell you how transparent you are not. So, that is a big safeguard and we see now a lot of unemployment in the mining sector. Reports coming out this week of former mining executives out of work and even mine workers not even being able to find jobs in the rest of the sector.
Some of them turning into car guards in these mining areas. The impact of not being transparent and not allowing people to go ahead with the activity in this area has been very negative for the economy. We just hope that credible external monitoring should be brought in, new targets set, new reforms introduced and then monitored. As we saw in the past, unless you monitor these things they fall into a bad situation.
Kamwendo: The proposed new Mining Charter in its current form will not promote investment and economic growth.
Creamer: This is the consensus of the mining community, there might be some hair raising difference that we don’t see now, but the consensus of investors, both locally and internationally are that this is not conducive to investment. It does not attract investment as it has still got inhibitors and is convoluted.
There is a big summit coming up on July 7 and 8, hopefully people will be able to put their heads together and come forward with something that is acceptable. In the meantime, the economy doesn’t look like benefitting much from the new Charter under the new leadership there. We can see that in other jurisdictions the things are going ahead fast, like our own iconic company Anglo American this week clinched hundreds of permits to explore for copper in Brazil. We just don’t hear that in South Africa anymore.
People are not coming forward anymore to put their money in the ground. That is a very disappointing thing, because as we say this is one of the flywheels of the economy. Unless you get it going you inhibit factories, industries, banks, insurance, project houses, because it is a very widespread industry. It draws on so many other sectors and you need to free it up.
The arrangement they had now with the junior miners to have one-on-one discussions that is going back to the discretionary past that we are trying to move away from whereas other countries are talking about exploration every day and how they are encouraging this. We know that happens in Canada and Australia and we need to see it happening here to get that encouragement here to get that investors will come forward.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.