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

Kamwendo: South Africa’s roads agency is gearing up to spend R30-billion on road development.

Creamer: This is just what we need in the South African economy at the moment. We know the Presidency unit has put out a whole lot of projects that are ‘shovel-ready’ and they want them to get going, because in a downturn this is always the way to go, the world over. We also see that the economic transformation committee of the African National Congress has called for infrastructure.

Now, we hear that at Sanral they are looking to R30-billion worth of expenditure on roads. They have already awarded contracts worth R7-billion. It would have been much more had it not been for Covid, because, of course, Covid slows things down. We are hoping that as we come out of Covid, the momentum towards greater infrastructure, roads, transport, energy infrastructure, water and sanitation, will hit top gear. This creates immediate direct jobs, and in the long-term even more indirect jobs. We are going for it in a big way, which is good news.

Kamwendo: Gold and platinum companies are flying sky high with free cash gushing into their coffers.

Creamer: You cannot believe how these companies are, the cash is flowing like you cannot believe. I am talking about AngloGold Ashanti that reported this morning – a five-fold increase in cash coming out of that company. People are going for gold and gold equities.

They are able to sell the gold and even smaller companies are doing well. We looked at the platinum sector, at Royal Bafokeng Platinum, and that is a very interesting one, because it is backed by about 300 000 people in the Bafokeng community. We are talking about not just doubling, but about  a 2 300% increase, yes 2 300%, in their gross profits.

This is marvellous for this company. It is doing good projects and platinum is also being recognised, along with gold, as a precious metal. Good for the mining industry and hopefully good for South Africa as it comes through. 

Kamwendo: At half the price of gold, platinum is continuing to attract strong investor interest.

Creamer: It wasn’t long ago when you used to pay a premium for platinum. The platinum price was higher than the gold price. Now that has turned the other way and you have gold bursting through the $2 000 per ounce mark and you only have platinum round about the $900 to $1 000 per ounce mark. When we look at gold in rands we are talking about more than R1-million per kilogram.

So, we have never had such good prices and the people are saying, let’s also look at platinum. Platinum got knocked back because diesel cars used to make a lot of use of platinum and then there was a bit of a diesel scandal and people backed off diesel. Suddenly, now we see in China, they are coming back strongly on the diesel front. Even Europe is showing strong on the diesel front. Above that people are going for platinum coins and platinum bar, in America as well. Platinum bars and coins at a certain stage couldn’t get through to the US because of Covid.

This was because some of the Swiss refineries where too close to northern Italy, where Covid was bad, so they closed down and a lot of Americans couldn’t get their hands on platinum coins and platinum bars. Now suddenly these are coming through and the record books are being rewritten. They are looking at an annual 600 000 ounces of  coins and bar that people are trying to get their hands on in platinum. They see it also as a good time to get in, as the price is much lower than the gold price.

We are hoping that this will help our platinum industry, because this is the biggest employer of people in any of our mining sectors. We know that palladium and rhodium are also flying high because of the demand for gasoline cars around the world.

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