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 ‘Great Tweet’ of Minerals Minister Gwede Mantashe urging South Africans to celebrate their wonderful treasure chest of mineral wealth has been met with resounding applause.
Creamer: Shakespeare noted that there is a tide in the affairs of men, which taken in the flood, leads to a fortune. This week’s ‘Great Tweet’ by Gwede Mantashe, urging South Africa to really see the good in mining, because of what it can do for the economy, is being taken in the flood, hopefully it will lead to a fortune. His tweet has been flashed across the big screens on the corporate level, every time there is a presentation up goes this tweet.
So much good can come out of mining and that it is time perhaps to stop using the stick and to start using the carrot, because under the ground are $2,5-trillion worth of metals and minerals. If you can’t get those out competitively, they are worth zero to you. This is a great realisation that is coming to particularly at government level will we see that the Minerals Minster Gwede Mantashe looked at the Amendment Bill to the Minerals and Petroleum Resources Development Act (MPRDA) and decided that this needs to be turfed into the bin, because it doesn’t actually help the situation and that the MPRDA, as it was, is better than the Amendment Bill and that the petroleum side of this industry must be enshrined in separate legislation in order to get the best out of it.
I think people are starting to realise that mining is essential for the modern world. Other mining jurisdictions are doing a lot to promote their industry. We need to do the same. We are talking on the phone now, smartphones could not function without copper, silver, gold, palladium, platinum, ceramics, titanium and a whole lot of other tongue twisters that we don’t even talk about. We are going to get energy from wind and renewable resources, a wind turbine requires 335 tonnes of iron-ore and it requires copper and aluminium, all mined ingredients.
A car that contains a ton of steel, 100 kg of aluminium, 19 kg of copper, even the modern florescent lightbulbs have got to have bauxite lead, copper, limestone and nickel. Even toothpaste contains silica, limestone, aluminium, phosphates, fluoride. Women’s make up contains mica and talc. The modern world is wedded to mining. Let’s do this well. We have got a great endowment and if done competitively can have massive spin-offs across engineering, manufacturing, banking and all the other industries and I think this penny is now dropping.
Kamwendo: Mining leaders are crushing the curse of mineworkers being forced to encounter deadly danger in South Africa’s deep underground mines.
Creamer: They are going hammer and tongs now putting their foot down that there cannot be another 58 deaths in one year like we have seen this year. We have regressed badly from where we were in 2015. We have just got worse and worse. Now they are saying we must have anonymous reporting coming through to make sure that the right of employees to withdraw from unsafe areas is upheld.
This has been a part of the legislative framework for a long time now. There is talk of not exercising that legislative framework and possible intimidation as well. Getting people around bonus mentality to move into dangerous areas. They are now formulating the bonusses around safe production and making sure that employees must know their right to withdraw and that supervisors may not intimidate.
We have had two safety summits and safety pledges signed. We have a Mineral Council South Africa decision to create a safety and health day in all 66 members precinct. Each one of those 66 Mineral Council members must have a hosting of a safety and health day in their operations to promote this and once and for all get rid of this curse of mineworkers being forced to encounter deadly danger in our deep underground mines. There are world-class safe productive systems that must be exercised to make sure that you have structures in place that stop anything that is dangerous.
Kamwendo: As South African gold mining goes from crisis to crisis, South Africans are cleverly passing the ownership baton on to lower-cost operators.
Creamer: We’ve had this situation of certain mining companies wanting high quality assets and having their cost structures develop around that and they become high-cost producers. On the other hand, you have other companies that have come in as bottom feeders, as we call that. They are prepared to take the low-grade assets and get rid of all the hierarchy and the big management structures and focus on the people underground, who are really doing the job.
They can do things at low-cost. We are seeing that South Africans are very wise in the way they are disposing of their assets. We have noticed that the Moab Khotsong gold mine that has been passed on to Harmony Gold, which is now so delighted because they are used to much lower-grade assets. This is a 10 gram per ton asset.
They are used to 5 gram per ton. They think their birthday has come because they have got this asset. Cleverly, one person’s meat is the other person’s poison and this has been working very well in South Africa where you get jobs preserved. You get margins of profit restored by a new company coming in that has a lower cost structure and is able to keep everything going because of that lower cost structure and that whole mentality from the start of making sure that you have got no big management hierarchy and you have got people at the face that are given all the attention to make sure that they can get the best deal.
But, at the same time there are many attractive opportunities outside of South Africa that attract some South African mining companies to mine outside the country. We see Harmony Gold, for instance, which has been a bottom feeder, as they say, now looking at what is a sensational asset in Papua New Guinea. It is so sensational this gold and copper asset.
There is so much copper that you can make so much money from the copper that you get the gold free. We also have this background of South African companies knowing where to go in the world to get some fantastic returns for their shareholders and potentially this is what Harmony is going to get at Wafi-Golpu, Papua New Guinea. It is all around the great expertise that they have built up over the decades in South Africa.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.