Inside Mining  :: Editor's Letter
March/April 2015
   Inside Mining

THIS YEAR’S Africa Mining Indaba was an interesting affair, to say the least. Investors, miners and politicians from Africa and around the world raised issues, expressed frustrations and provided insight, which it seems some African states have taken seriously.

Attempts to repackage nationalisation through equity holdings, royalties, tax, capital gains tax and windfall tax were met with resistance, and rightly so. There simply is no profit in laying out large capital investments merely to become what is essentially the hired help because you are better at running and operating a mine than public servants are. Government policy can make or break the industry. Caution is advised.

Raising finance remains a global challenge. But, with some commodity prices beginning to show early signs of bottoming out and improving, of which gold is the most likely to benefit in 2015 – because of its role as a safe haven in times of political and market uncertainty – things may well get better on the mining front during the coming year. For some commodities, such as iron ore and thermal coal, it will take a while before they start rising. Copper has come off a bit but is looking positive, and platinum is likely to turn this year.

And, in talking about platinum mining, we have the story of Phoenix Platinum where the modified adage, “One man’s waste is another man’s riches”, holds true. Another interesting platinum story is that of Wesizwe Platinum’s Bakubung mine. Here a bunch of journalists, myself included, enjoyed a trip down the 748 m deep work-in-progress ventilation shaft to get the feel of what it is like to be a miner. In what may be a bold attempt to solve the problem of predicting productivity in an open-pit mine, by avoiding the ‘bunching’ problem, I applied the scientific principle of observation and investigated the phenomena. In the process, and acquiring new knowledge (for me that is), and integrating it with previous and other knowledge, I came up with a solution and mathematical model that can be built into any Microsoft Excel spreadsheet. Does it work? Yes; on paper! You be the judge.

With the possible negative impact on the economy fearfully significant, Eskom’s electricity supply woes, while potentially debilitating, are quite irrelevant at the moment. What is needed, right now, are solutions to the energy crisis. In this issue we present two solutions: the first from Eskom itself and the second from a leading equipment supplier. The question to be asked is can you afford to live with load shedding? The emphasis of course is on ‘afford’. Fortunately we have examples of other mines, who have implemented both solutions, to guide us. It may just boil down to capital expenditure, for which you may need finance. And, therein is the rub.

Nonetheless, to be positive, in all things money, what goes down goes up again. This truth you can take to the bank.


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