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Real Economy News in Real Time
R/€ = 14.55 Change: 0.02
R/$ = 12.50 Change: 0.01
Au 1301.61 $/oz Change: -2.13
Pt 901.50 $/oz Change: -9.36
 
 
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On-The-Air (24/11/2017)

24th November 2017 BY: Martin Creamer
Creamer Media Editor

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: Turning mine dump sand into gold received a major boost this week when Sibanye and DRDGold joined forces.

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Creamer: This was a Neal and Niël deal. Neal Froneman of Sibanye Gold and Niël Pretorius of DRDGold and they have come together to try and work our dust on the mine dumps into gold and into money so that it can flow into the South African economy. I think it is a wonderful deal.

We know that DRDGold is really specialised in this out on the West Rand and they have done a fantastic job. I remember the days when they said they would rip Ergo apart, because they wanted to asset strip it, but thank God they didn’t do it, because it is actually churning out R2.5-billion a year in profits.

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That sets off  R25-billion worth of economic activity in the economy. These are very good when you think it is like a fairy tale when you turn dust into gold into money. Now, they want to do that one the West Rand, because Sibanye Gold has got a lot of dumps out there that they can also convert.

Also, the skill of doing it is really DRDs forte. They have come together and this will be a quick situation where they can generate cash fast, low entry level of finance not having to dilute any of the shareholders and getting that gold going. We know that the miners of old out in Driefontein, they used to leave quite a lot of gold on those dumps.

So the ones on the West Rand are  35% richer then the ones on the East Rand, which means that it is going to be quite a good return on the investment. We are hoping to see that go ahead next year and it will go ahead in phases. It won’t be the big bang approach that they initially had and they will also exlude the uranium at this point.

Kamwendo: Is that likely to help with the unemployment situation around those areas?

Creamer: A spin-off of money always has a linkage in the local economy and another big thing about this, I know because I used to live out there, that was a great market garden area. When the mines come in they took that water. Now, if you clear those dumps and you use the impact water you could have growth hubs, agricultural hubs, which would be fantastic out in that West Rand.

Kamwendo: Sasol this week announced a new growth strategy that shuns its pioneering technologies of turning coal into petrol and gas into diesel.

Creamer:  We used to think of Sasol being synonomous with gas-to-liquids (GTL) and coal-to-liquids (CTL). Now, they are emphasising speciality chemicals, not even commodity chemicals. Sasol, we used to remember, had big projects. They are talking now about moderate projects.

Sasol never used to acquire and now they want to buy stuff as well in the areas that they like. They are looking at 100 of their assets and some of those assets need to be fixed, sold or closed.

Already they said that they are going to sell some of the shale gas assets in Canada. They haven’t given too much more detail on what they plan to dispose of or possibly close, but in the meantime we see that this Sasol is now seeing that if you go GTL as they were very keen on doing it also has limitations because of fears of lower diesel off-take.

As for CTL we used to hear them say that they were as big as Saudi Arabia, they had as much coal in the ground to produce oil as Saudi Arabia. That was only 10-years ago with Pat Davies. Now they don't talk like that. Coal doesn’t come into the picture.

Kamwendo: Gold Fields this week became the second mining company in a month to give Wits University millions of rands to advance new mining technology.

Creamer: It is fantastic how consciously the mines have becoming about the needs for new skills, these 4th industrial revolution skills. They are putting their money where their mouth is. Last week we spoke about Sibanye putting R16-million to Wits Mining Institute.

Now, this week we see R6-million going into Wits University all about mechanised mining for Gold Fields, because they have got the biggest mechanised mine here. The biggest gold mine that is mechanised in the West Rand, which is South Deep. They want the people to do, and people skills are a big problem.

Even if I look at Australia now they lamented this week that there are only eight engineering graduates coming out of Western Australia University and only eight enrolments at New South Wales. So, here is a mining country worrying about the people to run mines. They don’t have enough people, because young people don’t want to do mining.

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

  

EDITED BY: Creamer Media Reporter
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