On-The-Air (13/06/2016)

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 row is brewing over of water meant for Gauteng being extracted from the Sterkfontein dam and not replaced as promised.

Creamer: Since the water crisis arose and the fear of drought arose, people are beginning to look very carefully at our water supplies. This person that is doing it is probably the best to do it. It is Mike Muller of Wits School of Governance.

He is a former DG of Water Affairs. He talks globally on water security and he has pointed out that our Sterkfontein dam reserve, which is bigger than the Vaal Dam, in December for some reason officials decided to take 10% of that water out. When they were confronted they said that they will be putting it back. Well, it is six months later and they still haven’t put this water back in the Sterkfontein dam. That is not fed by river, it is fed by Eskom.

The question is, probably having to be put to the Minister of Water Affairs Nomvula Mokonyane, why was this taken out and why has it not been put back? Water security has become crucial. If we hit another drought next year we could have a situation where there are serious water restrictions and that hits you economically.

If you tell a factory they can’t use water they have got to send everybody home. Particularly Mike Muller is looking at this very carefully and saying, also Lesotho Phase Two, why haven’t you gone ahead with it? He is saying again that Nomvula Mokonyane must tell us why she has not gone ahead and why the project is six years late.

Even if they tomorrow say they are going to go ahead with it, we will only get the second phase of Lesotho Water in 2024. He is rightfully starting to raise these concerns because we don't want to run into trouble. We know how important this water is to Gauteng because this is the heartbeat of the economy to jobs. So, here we are with this and one hopes that particularly the Lesotho Two will go ahead. He says it is embarrassing that Lesotho is ready and we are not.

Kamwendo: A brace of marketing thrusts has seen platinum break out of its low-price straightjacket.

Creamer: Above $1 050 they are saying it won’t go below. The experts are saying that they had done the calculations and it has bottomed. We see that better platinum pricing has been bought by a lot of marketing at the moment. Even as we speak now, in the UK the Oxford platinum lectures are starting, top brass are all there to elucidate about platinum.

That is very good for South Africa, but we have also seen this week how they have broken through with the marketing of coins and bars. The World Platinum Investment Council, which is backed by all the South African Platinum mining companies, operates out of London, has announced a tie up with a Swiss refiner.

This Swiss refiner will make sure that it creates the coins and the platinum bar to create a demand for platinum, which we have never had before. We have been talking about this for a very long time, but never doing it. They had a trial run in Asia and they saw that if you make platinum coins and bars accessible, you get sales.

Now, they want to make it majorly accessible and the area they are really targeting is the US, because they feel that platinum is undersold there. Then on the industrial side, we know that there has been a breakthrough. The German start-up has given us a much better outlook on how to transport hydrogen as a diesel look-alike that can use existing fuelling facilities. Now, we even find that BMW is saying that they are looking for a fuel cell car and should have it in 2020ish.

There are benefits from the fuel cell car that are above the electric vehicle, the range, the quickness of refilling and the cleanliness is zero emission. So, all those things are counting in the favour of platinum, which is so important to South Africa and Southern Africa, because we are the custodians of the biggest supply of this metal.

Kamwendo: Patrice Motsepe’s African Rainbow Minerals this week commissioned a major ferromanganese plant in Malaysia.

Creamer: We both cheer and also we get sad. Here we have a great corporate patriot, Patrice Motsepe’s African Rainbow Minerals, and Assmang having to go out the country to complete the ‘b-word’, beneficiation. Now, we had the Machadodorp plant, but it became uneconomical. Why? Because of the high price of electricity.

Talk is cheap, you can start talking about beneficiation and say this is our policy, but if it is uneconomic, what does a company do? Now, they are making the best of it, because they are saying that they have closed the Machadodorp plant, which is on care and maintenance. But, we don't want our miners to suffer, so we want to at least keep the mines going and it will take the ore from the manganese mines in South Africa and send it off to Malaysia, where the Malaysians have guaranteed them an electricity view.

They can see what they are going to pay for 15 years. Only 2,5% per year increase and the electricity comes from hydropower, which is also clean. We see that at Sakura, Patrice Motsepe’s African Rainbow Minerals and Assmang have now had the hot commissioning of ferromanganese and they will begin exporting from Malaysia from June and there will be a second furnace that will produce more silicomanganese coming through next year.

That is all grist to our mill. Not only do we say we are in favour of beneficiation, but we are actually losing beneficiation. The new furnaces could have gone in to Machadodorp, but you can’t do that if the economics don’t work out. So, they have had to now go over to Malaysia where they have hot commissioned this new ferromanganese plant.

Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly.