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: A pioneering black industrialist has secured a R50-million non-repayable grant from the government for a nickel plant in North West.
Creamer: We have been pleading with the Department of Trade and Industry (DTI) to come forward with the details on the non-repayable grants that have been issued to black industrialists. They have been a little bit reluctant and they prefer the black industrialists to come out and tell the story.
Well, one of them has done so and that is Ruli Diseko and he has got the business Thakadu Battery Materials. The word battery must spring to life, because what has been happening at the Lonmin base materials plant in the North West, this crude nickel sulphate stream has really been fetching low prices. So, what Thakadu is doing now is that they want to take that crude nickel sulphate steam and they want to give it a high-purity push to turn it into battery-grade nickel sulphate.
The loadings of this battery-grade nickel sulphate are now increasing in the world, because of our move towards battery technology, which is on the lips of so many people across the world. What they are doing is they are going to put up a R250-million plant at the Lonmin site and this is now being boosted by a R15-million non-repayable grant coming from you and me, the people of South Africa who are prepared to put this in.
We know that the return on this according to the figures look pretty good. It looks like an internal return of investment of about 47% going over the life of the project. So, it looks like a very good project, coming at a very important time and we see that it will go into nickel cobalt aluminium oxide and nickel manganese cobalt oxide.
The word cobalt should be springing out at us as well, because although we see an opportunity here in this nickel sulphate, what about the cobalt that we are losing in South Africa, because of the way that the platinum industry processes its material using excessive heat? People are saying they should go the hydrometallurgical route because then you save the cobalt. If this is so, we must definitely do it in South Africa, because we see that people in the world are already saying that we are going to run out of cobalt in this new era of battery technology.
They have even called on scientists to start looking for alternatives, because the world is going to run short of it. But, if we could start producing it here, it could be a great market for us and maybe another opportunity. Hopefully, the DTI will now give more names so that we can go to these people and see what great stories come out from the money they are getting from the people of South Africa in the form of non-repayable grants.
Kamwendo: The private sector is taking a rare plunge into plant nutrient minerals that could see the creation of a new South African fertiliser champion.
Creamer: We are still importing a lot of fertiliser in South Africa and we should be doing much more locally to actually produce that fertiliser. We know we have got Foskor the big fertiliser and phosphates producer which is State-owned, because the IDC has got control of that, but the private sector has always been reluctant to plunge into this area and the investing community has been reluctant to lend money.
What we see now is the company Kropz, down in the Western Cape. Kropz has plunged in and under the new leadership of Kropz CEO designate Ian Harebottle. You can see they want to go big, because they are saying there is such a huge opportunity here that the world is going to have to produce a lot more food. They are talking about producing more food in the next 50-years then was produced in the last 10 000 years. To do that, you need crop yield and to get crop yield on less ground now available, you have got to use fertilisers. So, they are going heavily into this plant.
They have already put in about R1-billion on the West Coast. They have run into, of course, the drought issues in Cape Town which are not helping. They are now pushing ahead and wanting to go to the next level with this production of phosphates and moving into the vertically integrated fertiliser business so that they can also support our small farmers that should be coming up here. They were talking about the big farmers have got a lot of opportunities, but the small-scale farmers, which are important and which we try to encourage here in South Africa entrepreneurial type thing, they want to also supply these farmers. They have been doing these experiments and the one experiment they did is that they put nutrient into the soil, dug it in quickly, and grew aubergines. These aubergines they say was as big as the guys baby almost.
That is how you can stimulate plant growth. They are big now into developing these plant nutrient minerals. When Ian Harebottle was head of Gemfields, the coloured gemstone business he used to say: ‘I want Gemfields to be the De Beers of coloured gemstones.’ Now, he is also thinking big and saying he wants Kropz to be the Glencore of this arena, because he see such a massive opportunity in South Africa and the world.
Kamwendo: Strong calls are being made for South Africa to strengthen its exploration and junior mining sector.
Creamer: Unless we get more emphasis on the basics of mining, mining is going to fade out, because it has been badly knocked by the regulatory environment, which has been very poor. Most of the work that has been done by our Chamber of Mines are just to look after existing mining companies, the holes that are already in the ground making sure that we can get everything out of that.
Nobody is thinking of the unexplored areas, not even our Council of Geosciences, which is State-owned, which needs to look inward. They have been doing a lot in Africa and need to look inward and re-explore modern technology. Mintek, also State-owned, needs to do more, but also the investor community in South Africa, they don’t want to go into the small stuff, because they are all part of pension fund.
A big plea has been made now by Dr John Bristow, he has put up mines, and he is saying let’s get the small miner community going so that black ownership can be there in real terms and we can have real transformation. He is saying that there is a lot of opportunities and his sentiment is confirmed by many saying South Africa is over exploited and under explored, because we have always had engineers doing everything, not enough geologist.
Why can we not go the Australian route where there is 600 listed companies in mining, most of them doing exploration a lot of them in Africa. We have got 22. The Canadians have got 230 of these mines. South Africa has fallen behind very much, because it can’t get anyone to invest in the smaller companies, whereas the Australians can. They say in Australia if there are two ants running up the wall you will get people betting on who will be at the top first.
The Canadians have got special tax benefits to support the small miners. We have not got that here. We are looking at Section 12J of the income tax act, maybe that will be the answer. But, people must start saying whether it is or isn’t soon and the investor community needs to come behind these smaller miners as they get on the Stock Exchange so we can explore the value in the ground there, because in the words of many we have still got a geological jewel box in our ground.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.