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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: A new deal for South Africa’s mining industry would put an end to poverty, Parliament was told this week.
Creamer: Get mining a new deal, and it will strike a mighty blow against poverty. That is what Parliament was told during the budget vote of the Department of Mineral Resources and Energy. I believe that that can be brought into real truth, because we have got a fantastic mining endowment here. But mining is shrinking, because we haven't been exploring. Also, it is not really a new deal that is needed, but tried and trusted is an old deal. It is old in Canada, it is old in Australia, it is old in Chile and it old around the world – where you just incentivise exploration, because it exploration quite a risky hit-and-miss business. There is a special system for doing it.
The Canadians did it. In the 70s they started doing it, they have made a fortune in taxes out of it, they have grown their economy from it. If you go to Canada, you will see that a lot of ordinary people are investing in exploration because there is an incentive to do so. Now we can do that here. The National Treasury acknowledged twice and concurred twice, that exploration needs incentivisation. They introduced two schemes, both of them did not work. The whole plea now is don't try and reinvent the wheel, because mining is in not such a good state at the moment as it was in the past. We need to promote it through a flow-through scheme that incentivizes exploration in the way that has been so successfully in other countries, particularly Canada.
Kamwendo: A huge looming shortage of platinum has sparked a global hunt for platinum scrap.
Creamer: Yes, the world is going to be short of close to a million ounces of platinum. Among the situations are South Africa's electricity problem. So they are projecting this. There are also other problems around the world. In America, there have been problems with shafts that produce the product and in Russia there have also been problems at Nornickel. You have a situation of a glaring deficit of platinum. What do you do to provide the market with a metal that they need for protecting Mother Earth in vehicles particularly?
Well, you know, what they saying is that mining, and even recycling is not going to be enough to close this gap. What they are seeing is that possibly those who are invested in hold above ground stocks, that is physical platinum that they hold to protect themselves against banking failures and investors protect themselves in all ways, including holding on to physical platinum. They might have to now draw from above stocks trying to attract those stocks into the market. No one knows what price needs to reach to attract that into the market. So it's a very uncertain period. At the moment, people wondering if they do attract those above ground stocks at what price will that be? And it's risky, because if the price shoots too high, you know, people look for another product. So quite a crisis within the supply side of platinum at the moment.
Kamwendo: A small gold-mining company this week announced big plans to generate its own electricity.
Creamer: Pan African might be a mid-tier minor, but it is behaving like a mining major on the renewable energy front. They were the first to get out of the starting blocks with 10 megawatts at Evander. Now they are looking at another 40 megawatts coming off site. So that will be at Bella Bella in Limpopo, where a company that is involved with renewables will produce 40 megawatts and that will then go into the whole of the Pan African group. So it can go into the Barberton mines, can go into the Evander mines, can go into Mogale where they are now on the West Rand. That will also be augmented by on site activity.
So on site, they are going to put another eight megawatts plus at Fairview in Barberton. Then with the Evander site has already got 10 megawatts. That is going to go to another at least 12 megawatts and all the way they are saving a fortune of money and they are looking to save you like R800-million over the term. So it is a huge business case for even small mining companies to generate their own electricity and at the same time, they are making sure that tons of carbon did not get into the atmosphere. That is a huge benefit for Mother Earth. So by using the sun and the wind, they are protecting our heritage as well.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News & Mining Weekly.