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: An Australian company will list on the Johannesburg Stock Exchange on Monday to bring South Africa’s dormant copper riches back to life. 

Creamer: The sound of the African Kudu horn will go through the halls of the JSE on Monday, but on the lips on that Kudu horn will be those of Australians. They are coming in to invest in our Prieska area. We have been falling asleep at the wheel and they have picked up that there is a huge potential out there.

Not only in the exploration front, because they have got 1 600 square kilometers of rights to go out and explore, but in a mine that has been defunct for the last two decades, but has good infrastructure. We know that two decades back there were 4 000 people operating there. Our fourth biggest mining house Anglovaal was very active, mining copper and zinc in that area. Because of bad conditions at that time and uncertainty they closed the mine, but the infrastructure is still there.

The shaft goes down 1 000 metres and there are declines and the Department of Minerals and Resources has given Orion Minerals, the Australian company that is going to list on Monday, the right to go down and access these and have a look. They like what they have seen to such an extent that although they are mainly listed in Australia, Sydney, they have seen fit to come and secondary list in Johannesburg, to give South Africans and opportunity to also invest in this, which is a good sentiment, because it is something that we need to be involved in as well.

The area as I say is large square kilometrage, but what they are looking at is something that has near-term production potential, near term activity, which is going to attract investors. Although they are an exploration company they are now looking at being close to production in our Northern Cape Prieska area, which has tremendous potential. We know that there is demand for copper at the moment, we can see that copper is going to be used in so many different situations in the modern world. Also, zinc, we have seen that zinc price go up, those are the two commodities they are seeking to get there.

They are coming through the JSE which is a great feather in South Africa’s cap. I think we should be proud of South Africa’s JSE and the comments that they have made about that exchange are very favorable. It is a stock exchange that has a R13-trillion market capitalisation, 380 companies, 75 foreign domiciled companies invested there and with a bit more policy activity in South Africa we could see a lot more listings on that exchange.

Kamwendo: South Africa is benefiting from the rising global demand for the quality, high-purity metals, as a means of mitigating climate change.

Creamer: This came out at the presentation of African Rainbow Minerals (ARM) where they were saying that they are getting better prices and a premium for their quality because of the steps being taken particularly by China to mitigate climate change. People don’t want metals to put pollution into the air, they don’t want impurities. Now iron ore and the iron ore that is produced by ARM with Assmang that goes into the world markets is lumpy.

Because of that lumpy you have seen not only the benchmark price change but the premium that people are prepared to pay for that price go up 15-fold. Just a few months back they were prepared to say and I am not talking about the actual price of tonnage, which is about $60 per ton, but if they see it is good quality they say that they will offer more.

It has gone from $1 to $5 in a very short time, because of this big move by China saying we want quality and we don’t want to have dirtiness in our air. We also find that when we get this lumpy ore from South Africa it is cheaper. It actually lowers our cost, so that is putting us in a nice poll position, because also with our manganese I know that people come out to South Africa they look at our seams and say wow, the quality is unbelievable. The Chinese are finding that it has got low impurity and they put South African product in the front of the queue. We can see with the climate change issues being so huge in the world at the moment, it is starting to benefit the quality of our minerals and metals and this was raised very strongly by ARM headed by founder and executive chairperson Patrice Motsepe.

They are also very happy with what they have got in Malaysia at Sakura they built a big manganese alloy plant and the customers love this, it is also good quality and prices. But, it hurts me as a South African to say this, because I know that that Sakurashould have been here in South Africa. Why they decided to build in Malaysia is because of Eskom. Eskom has not come to the party, the price of electricity just getting out of hand.

Now we see they want another 19% to 20% addition. This is the sort of things that happens, instead of ARM and Assmang and their partners building a manganese alloy plant in South Africa, we have always had manganese alloy here, they go to Malaysia. Will they ever come back? Never, because they are so happy with what is going on there. The quality is so high. Why did this happen? Because our basic fundamental input cost of electricity is too high. We have never had that before, that is why we have beneficiation. Government says they want to beneficiate.

How can you have beneficiation when all the basics are out of kilter? This is where people are now saying we will start producing our own electricity, because we don’t have enough confidence in Eskom, but in the meantime we see his big project in Malaysia doing very well. We also see ARM talking about electric vehicles and demand that is going to create potentially for their nickel.

The fact that they want to get into copper more and is a very interesting part of the business now. Even platinum group metals, they are holding on to them tightly because they feel there will be a demand also in the realm of climate change, because people want fuel cell electric vehicles. They will be in a position to be able to supply the platinum group metals for that. They are looking on this even though the price at the moment is not good.

Kamwendo: The Department of Trade and Industry is well on its way to financially supporting 100 black industrialists by fiscal year-end.

Creamer:  This is indicative of the tremendous spirit in South Africa of entrepreneurship. Here we have got 62 businesses coming forward, getting in line for R3,6-billion worth of non-repayable grants. It shows you that they are there.

You are not going to get this money easily we know that the Department of Trade and Industry is going to do due diligence and there is a lot of red tape, but yet they have seen fit to put out 62 people, give them a boost with funds so that black industrialists can get going. Their target is 100 and they say that they will meet that 100, no trouble in meeting 100 by the end of the financial year.

They are not talking about next year, so I don’t know whether those funds are going to be available next year. So, R3,6-billion will be taken up and we are glad that the likes of the State-owned Industrial Development Corporation also has R20-billion available for black industrialists. One gripe we have, the journalist said give us this list of these people who are getting non-refundable payments, they said that they would give the names and we expected them round about mid-year, but they didn't come mid-year.

Then they said that they are not going to give the names directly, they are going to give them to parliament first as part of their annual report. Now, that is ingratious. When they did give them to parliament, time is money, you can't go through this big wad of stuff and they just give you a whole block of 62 names. Names that you are not really familiar with.

They don’t say this guy is in food and beverage we have given him so much. Surely, they should do that, be gracious about the way they hand out non-repayable grants of the money that is really ours.

Kamwendo: I’ve asked one of the parliamentary reporters Makenana when this story came up that I seem to recall we were promised a list of names and as you say just give us the names.

Creamer: They have given us the big block of names, but it is so difficult to navigate and time is money, make it easy. After all we can give these people publicity, which is awareness which is free advertising.

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