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

Pillay: A China-backed South African mining company plans to build a rich metallurgical coal project in Limpopo province.

Creamer: This company is MC Mining, it is listed in London, Australia and Johannesburg and it is intent on building a hard coking coal mine in Makhado in Limpopo. This is fantastic for South Africa, because we import coking coal at the moment. Our steel makers have to rely on coking coal from Australia and the United States.

If we produce it here that means we don’t have that money going out the country and even more so we will be exporting coal and we will be creating wealth and jobs in Limpopo, which is so important at this point in time. They are hoping that they can really break all the barriers.

At the moment they have got all the licencing you need, but there is resistance from key property owners to allow them to do the final drilling, which is really minor at the moment, but they just can’t get access to the actual land to do the drillings. So, hopefully they will solve that problem so we can get this wealth creation in South Africa.

Pillay: Investment in South African mining was strongly promoted at this week’s Denver Gold Forum in the United States.

Creamer: We have to promote South Africa as an investment destination. All our competitors in mining around the world are promoting themselves. It was fantastic that Sibanye-Stillwater and Harmony Gold went to Denver in the United States and promoted South Africa and also fought against this idea that if you are in South Africa, your share price must be lower. It is called the South African discount.

Now that is very bad for us so we in South Africa are rated lower on global stock exchanges, because they say we are high risk and therefore our share price must be lower. When that happens, we can’t raise the sort of funds that our competitors can raise.

South Africans are now fighting against this and saying that we want this discount removed, because it is fictitious. We have so many new improvements and advancements in our economy at the moment that we shouldn’t be discounted.  

Pillay: The government of Australia this week identified mining as the main driver of Australia’s high standard of living.

Creamer: This is something that we have to bear in mind in South Africa that our competitors are actually promoting themselves very strongly. Australia have done this with their Resources 2030 Taskforce report.

This emphasises that the biggest driver of the high standard of living in Australia is mining. That is in a place that only has a population of 20-million. We have to drive this in South Africa, because we can get a lot of wealth creation here. We have got some good assets. We don’t advertise ourselves enough in the same way.

The Australians are even now talking about going downstream. Now in the past we were the ones that said beneficiate, go downstream, add value. The Australians used to say dig it out the ground as fast as you can, put it on a train, get it to the port and get it to China. Now, they are even looking at what is our bread and butter, the beneficiation from the downstream.

I think that we need to look afresh and try and brand ourselves as they are doing as a natural resources destination that can actually create wealth for many people, including the investors.

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