Every Friday, SAfm’s radio anchor Bongiwe Zwane speaks to Martin Creamer, publishing editor of Engineering News & Mining Weekly. Reported here is this Friday’s At the Coalface transcript:

Zwane: South Africa’s mining industry created 2 000 more jobs in the second quarter of this year.

Creamer: Every single job that is created in South Africa is so important. In the second quarter of this year, mining bucked the trend and it created 2 000 more jobs. That should give a signal to the government that if you encourage mining, it is a very resilient business and it can not only employ people directly but also indirectly, because for every one mining job created, there are five other non-mining jobs set in motion.

This is an important lesson, particularly at this time. I think that one of the things that needs to be encouraged is exploration. We have been waiting so long for a cadastre from the government. We still haven't got one. We have got people in South Africa who can build cadastres. They are doing cadastres in Zambia brilliantly. They are doing them elsewhere in Southern Africa, but foreigners have been brought in to do cadastre work in South Africa and they are taking such a long time that it’s heartbreaking. So, we need to get going here, fast.

Zwane: The leadership baton has been passed on at one of South Africa’s major gold and platinum mining companies.

Creamer:  The mining company in question is Sibanye-Stillwater. This is a company listed on the Johannesburg Stock Exchange and the way they’ve handed over CEO leadership is exemplary. It has been smoother than a margarine and they planned it so long in advance. This week on Tuesday, Neal Froneman, who has been there as CEO for more of a decade, handed over to Richard Stewart, who has also been there for many years. That is what you want. You want people who are working together. You want people who understand the business well to take over the running of the business seamlessly and you want the planning to be such that when you hand over that baton, there is no disruption.

That is what we’re seeing here at Sibanye-Stillwater, which is so good for South Africa. Also, even on the very last day, there were releases coming out from Neal Froneman, who has now retired from the job of CEO, He reported that costs were going to be lowered and this was because Sibanye-Stillwater has gone into renewable energy. They have gone into sun energy, they have gone into wind energy, and that is so important as well. So, right until the last minute people were working on a smooth transition and the person in charge now is Dr Richard Stewart. I want to say doctor, because he is a doctor of geology and that is important.

Zwane: The best way to build mines is through discovery and development, a South African has proved to the world.

Creamer: The South African we are referring to is another doctor of geology, this time Dr Mark Bristow. He emerged as a great academic geologist from KwaZulu-Natal, went into the world, is now just stepping down from Barrick in North America, where in less than seven years he elevated Barrick from being a low-flying Canadian operation to a high-flying business, which is like what his South African business was doing as Randgold Resources. It was high flying, which is why they took over his company, but how did he get it there? He did it through discovery and development.

Why do we say discovery and development is so important? Because when you look at the cost of the gold ounces that he discovered and developed, the cost was at the low level they should be. The cost of discovering them and developing them was a mere $10 an ounce compared with average that you see when mergers and acquisitions take place from companies not intent on discovery and development. While Bristow’s cost was $10 an ounce, the average cost through mergers and acquisitions is a sky-high $440 an ounce. So, you are paying over the top and then if you look at some of the high costs outside of the average, some are even at two times the $440 an ounce. So, the lesson for South Africa is get exploration going, get your geologists going and let's discover and develop not only in South Africa, but in Southern Africa and elsewhere, because this is what helps the shareholders. This is what helps the communities around the mines. This is what helps everybody.

Zwane: Thanks very much. Martin Creamer is publishing, editor of Engineering News & Mining Weekly.