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: South Africa Inc has a rare opportunity to seize the moment and save its battered platinum patrimony.

Creamer: For the past 45 years, a lot of money, billions of dollars have been ploughed into the promotion of platinum jewellery. That is done by Platinum Guild International (PGI). They have flown into South Africa with a strong message. There is a huge opportunity to create more the demand for platinum.

They are saying seize that opportunity just in China alone they say the ounces could be double. They really know this market. As I say, they have been studying it for 45 years. The best way to get platinum going and to keep our national patrimony in platinum intact is to go the demand route. When we try the supply route it means a loss of jobs.

This was great news from Huw Daniel the CEO of PGI saying that in China he could take the 1,4-million-ounce market there and turn it into something with an additional 3,5-million. He is saying that they will do that, because although in the big cities of Beijing and Shanghai there is a sort of a saturation because of this jewellery.

There are 250, of what he calls tier three provincial cities. He says this marketing of platinum jewellery is a numbers game and they know what they are talking about because they have been doing this for 45 years. Their big intellectual property is the study of the platinum jewellery consumer and they are saying that South Africa has an amazing asset, not only the platinum in the ground, but also platinum jewellery.

He is saying that the fastest moving jewellery in China at the moment is gemstone jewellery and platinum has only got 20% of that. So, if it can move faster into that gemstone area it can really boost the sales of platinum in his view. He is also saying in the United States there is a potential for just the gold diamond rings, which are the biggest seller there to have a platinum head, would push up another 150 000 ounces in that big US market, because platinum has got much better density then gold.

The platinum jewellery is 99% pure vs gold which is 75% pure. But, of course there is always a caveat with all these things, because we know that for years De Beers ploughed billions, and they are still doing it, into the marketing of diamonds. The slogan a diamond is forever according to advertising ages, it is the most recognised slogan of the 20^th Century, with 90% of all Americans knowing what a diamond does.

De Beers has used the slogan since 1948. So, what is happening with South Africa, we have been ploughing a fortune into marketing of diamonds and now platinum, but because of the constraints in the diamond business, the money fund that has got to come from the mines. The funding of this platinum marketing comes from the mining companies. Now, they are going through a very tough time, so what has happened with PGI is that their budget has been constrained.

So, they have had to now move and prioritise, which means that Europe doesn’t get any more marketing in platinum jewellery. It had to go for the fastest growing, so they are just in China, Japan, US and India. India they are saying is only 900 stores selling platinum jewellery, they recon that could easily be boosted to be on 2 000 to 3 000 stores, because the growth there is exponential. It is growing at 25% off a low base.

They are saying that because of the lack of diamond promotion in that area,  platinum has been able to move in and now platinum has become the forever love symbol.

Kamwendo: A vibrant future is being planned for the three remaining South African gold mines of AngloGold Ashanti.

Creamer: They have got six operations and we hear a lot about the three that are going to head for care and maintenance closure is this Section 189 talks reach a conclusion with all the employees. We know that some of them are very old that are going to head for closure. TauTona is 60 years old, Savuka 59 years, Koponang 36 years old and they are running at a loss.

It is very important that these close, because in closing them you can boost the other three. This is what they are planning. A very vibrant future backed by R2.6-billion for the remaining three, particularly the Mponeng mine. We know that it is very deep and people are often very fearful of depth, but not in this case, because it is a rich mine.

It has got a 50-million ounce resource, a 12,5-million ounce reserve and high grades. They are really ploughing the most money, R1,1-billion into Mponeng. The idea of trying to combine that with TauTona is not really working, so it looks like TauTona is heading for care and maintenance.

There is also the Moab Khotsong mine, which is a pretty close second and also getting investment and the mine waste solutions, which is gold on surface. It is a positive story out there as well as the negative part of closing. Mines have to close at some stage, these are old mines that are heading for closing, but there is big investment coming into those mines with a long-term future.

There is also the idea of all the technology that they have developed from their high strength backfill being used conventionally. They just need, instead of the ultra-high strength, the high strength backfill to make sure you can knock out the seismicity potency at depth and also get the benefit of high production.

Kamwendo: An Australian-based firm is showing South Africa how to develop black entrepreneurs in the field of engineering.

Creamer:  Isn’t this crazy. We are the uBuntu people, we should be doing it. But the Australians in here, WorleyParsons, and they have got 13 enterprise companies that they have been developing.

This is fantastic for the engineering sector, because it is very difficult for these small enterprises to break into that. If they come in under the WorleyParsons label they get open doors. We saw that they had a fantastic supplier growth conference at their Johannesburg offices and they engaged in what they called speed dating, but not of a romantic kind.

It is to put the minos with the giants so that the small enterprises, 13 of them can move into that engineering field and make a big contribution in South Africa.

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