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MINING & MINERALS SPECIAL fEAtuRE
JANuARY 2010fREIGHt & tRADING WEEKLY
Malema fuels debate on nationalisation of mines
60% growth in new route to interior
for export manager Paul Chappel
Mining downturn sparksFresh approach
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JANUARY 2010 | 1
Editor Joy OrlekConsulting Editor Alan PeatContributors Liesl Venter Advertising Carmel Levinrad (Manager)
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Page 2Fresh approach … Downturn inspires exporter to seek new markets
Page 3Rising commodity prices bode well for positive 2010
Page 4New route to Zambia grows 60%
Page 5Commodity price recovery heralds positive outlook
Page 6Mining projects beginning to brew again
Page 7Bertling to strengthen Africa muscle
Page 8Three new destinations on the schedule this year
Page 9‘Investors need reassurance on return on investment’
Page 10Owned network of facilities provides the edge for haulage company
Page 14Zambian Copper Belt gets back on its feet
Page 15‘Mine to furnace’ service for exporters
Page 16Malema fuels debate for nationalisation of mines
BRIC countries will drive next commodity boom
The recovery and upward growth of commodity prices is likely to continue well into 2010, according to analysts – and service providers are gearing up for better times ahead.
FTW takes a closer look.
Cover photo: Paul Chappel of Pilot Crushtec.
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Mine workers drilling for gold in a mine near Welkom.
2 | JANUARY 2010
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Fresh approachDownturn inspires exporter to seek new marketsBy Liesl Venter
2010 will be about focusing on clear objectives and moving beyond the economic downturn.
“Although the recession is over, we need to focus on innovation and establish new export markets while reinforcing our existing markets.”
That’s the view of Paul Chappel, export sales manager of Pilot Crushtec, a supplier of mobile and semi-mobile crushing, screening and materials handling solutions for industries as diverse as coal, diamond, gold and cobalt mining.
One of the fundamental components of the 2008/2009 global financial crisis was risk aversion, said renowned economist Dr Keith Jeffers. And mining is inherently a risky business.
It was possibly one of the worst affected industries during the global economic meltdown. Mining activity
around the world suffered – and along with it, exports and imports.
“We experienced a delayed reaction when it came to our exports,” says Chappel. “While others started to feel the pinch of the global financial crisis, we were still doing good business and only experienced the negative impact in the second and third quarter of last year.
“Fortunately, this trend of downward sales seems to have ended with excellent orders into Africa towards the end of last year and many orders on the book for delivery early this year.”
The impact of the crisis on the mining industry was felt across the entire supply chain, says Chappel. “I don’t think any of us really thought that it would be as bad as it was. Most of our export markets were affected negatively, but some of our high-end technologically advanced crushing units like our TwisterTrac
mobile Vertical Shaft Impact (VSI) crusher still showed an increase of 35% in sales. “However, although the recession in South Africa and many other parts of the world is officially over, it is going to take some time to get overall export figures back to where they were at the beginning of 2008.”
In the mining industry particularly companies were forced to place huge emphasis on efficiency and cost containment. As commodity prices crashed, many mines were forced to close while others downscaled heavily on production.
But with 2010 comes not only a more positive economic outlook but also the opportunity to realign strategies and visions. “It really is about looking sideways and digging deeper to reach our goals. We have to work much harder but there are many opportunities out there – it definitely is not all doom and gloom.”
One such opportunity has come in the form of a ferrometals recycling plant in Croatia. “A local company from the North West has asked us to supply a Pilot Modular plant to them which will be exported to Croatia where they will be crushing and reclaiming ferrometals.”
Paul Chappel ... ‘With 2010 comes not only a more positive economic outlook but also the opportunity to realign strategies and visions.’
JANUARY 2010 | 3
Rising commodity prices bode well for positive 2010Upward growth likely to continue – analyst
By Liesl Venter
The rapid industrialisation and urbanisation of China and India, rising disposable
incomes in western economies, and rising commodity prices will all offer significant growth opportunities for mining companies in 2010, says Wonder Nyanjowa, Frost & Sullivan mining analyst.
“There already has been a dramatic improvement in commodity prices from the sharp declines that were experienced in the second half of
2008,” said Nyanjowa. “The gold price currently sits at around $1 150 an ounce from about $600 an ounce in September 2008. Platinum is trading at $1 470 an ounce at the moment compared to the $750 an ounce in September 2008. This recovery and upward growth in commodity prices is likely to continue well into 2010 given that most western economies are now officially out of the recession.”
This positive outlook is a much needed answer to many a prayer in the mining industry. In South
Africa alone some 100 000 jobs were lost in the sector. “The economic meltdown resulted in a sharp decline in commodity prices which reduced industry profitability levels. Credit dried up and expansion projects were all shelved as companies functioned on operational efficiencies and the preservation of cash,” said Nyanjowa. “Marginal operations were also dropped. For governments the economic meltdown resulted in reduced tax collections from companies, declining export receipts and widening current account
deficits, affecting local currencies as investor appetite for the emerging market risk dropped sharply.”
According to Nyanjowa, the future seems much brighter at the moment. “It does of course depend on the risk investors are willing to take and the time frames involved. Gold and platinum prices have reached record levels and will be lucrative industries to tap into in the coming months. However precious metals like gold and platinum are generally capital intensive and they have thin margins.”
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New routeto Zambia grows 60% as cargo zips through
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Namibia’s corridors are not only becoming a more cost-competitive option,
but are also offering deeper regional integration, linking countries and moving Africa’s minerals quickly.
“They are definitely competing effectively with the Southern African routes and corridors,” says Philip Coetzee of Manica Namibia. “The key is to find a balance between inbound and outbound cargo as this secures capacity on these routes and competitive transport rates.”
The main focus in terms of commodities is chemicals,
equipment and consumables for inbound cargo, while copper, manganese, zinc, charcoal and uranium form the bulk of the outbound cargo.
“The three corridors – the Trans Kalahari linking Walvis Bay with Gaborone and Gauteng, the Trans Caprivi which links Walvis Bay with Zambia, the DRC and Zimbabwe as well as the Trans Kunene which links Namibia with Angola – have all seen major development in recent years and continue to do so,” says Johny Smith, Walvis Bay Corridor Group (WBCG) business development executive.
“We are seeing phenomenal growth and hope to continue to do so. On the Trans Caprivi corridor, which has a transit time of three to four days from the Port of Walvis Bay to Zambia, we have seen 60% growth alone. If you take into consideration the port development of more than N$450 million, the improvement in shipping services and the increase in container capacity, it makes sense to use these corridors.”
Coetzee believes the focus for 2010 will be on mining houses committing to certain volumes over a period of time. “This will ensure capacity stability from a logistics point of view. The benefit for the customer can be price, alternative routes, additional capacity, faster access to the market, security and reliability.”
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Commodity price recovery heralds positive outlook for 2010By Liesl Venter
2010 is expected to see a significant recovery in commodity prices as well as
improved demand from the Far East for minerals, says Dennis Trotter, Gauteng-based regional director of SACD Freight.
“There is no doubt that the past year was tough with the collapse in commodity prices, but we were in a position where we in fact increased our market share and extended our warehouse capacity to accommodate the additional business,” says Trotter. “Looking at 2010 we are hoping to improve on this and as demand for minerals increases, the challenge will be in finding enough vehicles to move the cargo and to find return loads for the trucks when in South Africa.”
SACD’s freight stations provide a wide service spectrum including full and empty container handling, pack and unpack, warehousing and receipt and dispatch by road and rail.
“In Johannesburg we have specialised in the mining export market, providing a consolidation service to several major players in the industry,” says Trotter. “We receive cargo by road, warehouse and add necessary services such as weighing, sampling, re-bagging, sorting and documentation prior to actually packaging according to customer requirements and moving to ship stacks in the port of departure.”
According to Trotter, when working in the mining industry, safety is of utmost importance. “Along with accuracy and attention to detail and computer-generated reporting, you have to invest heavily in security if you want to be successful in the minerals industry.”
With facilities in Durban, Johannesburg, Cape Town and Port Elizabeth, SACD has been in the business since 1977.
Dennis Trotter … warehouse capacity extended.
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Mining projects beginning to brew againConstant improvements in infrastructure
By Joy Orlek
While the drop in commodity prices and the global recession impacted heavily
on the mining industry last year with a number of projects shelved, things are clearly looking up, says Micor national projects manager Elise Stojanovic.
“Exports and imports were down 30-40% and millions of dollars worth of projects were deferred, but it’s starting to brew again. We’re seeing a lot more enquiries and commodity prices are beginning to firm.”
Micor offers a global door to door service, handling imports and exports. “We like to get involved when projects are still in the pre-feasibility stage as that’s the pivotal place to start,” says Stojanovic, whose background
includes experience both in the mining and logistics industries.
Her mandate is to build the company’s African footprint.
“Of the 53 countries in the region we have 34 covered. From a worldwide and African network point of view we have grown considerably, with Agility being our worldwide partner.
“In the past six months we have extended our network significantly, putting Micor back on the map as a project specialist.”
The company’s main focus, apart from Africa, is the CIS. “We’re doing a project for Batemans in Russia as well as extensive work into the DRC, Guinea and Botswana.
And despite the recession, the projects department has grown, says Stojanovic.
“Micor and the Supergroup understand how the project industry works.
“It’s not an influx of constant business – a project can take up to 24 months to come on line. We are fortunate that our staff are multi-
skilled so when the mining industry was down, other projects like the Gautrain kept us going.”
And while infrastructure in the region continues to be a challenge, Stojanovic is upbeat about the future.
“Infrastructure into Africa is getting better every day – rail is better, roads are improving, in the DRC the ferries at Kazangula are being replaced with bridges and we can see the difference. Whereas it used to take eight to twelve days to reach the DRC, we can now do it in five, depending on the load.
“African countries are realising that the only way to move forward is to put money from resources into their infrastructure.”
A policy that is already paying dividends for the region and the logistics providers who have made this their specialist focus.
Elise Stojanovic … ‘The company’s main focus, apart from Africa, is the CIS.’
No cargo too big ... Micor’s projects department on an upward trajectory.
JANUARY 2010 | 7
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Bertling to strengthen Africa muscleBy Joy Orlek
Significant new project developments are under way on the continent as improving
commodity prices set the scene for expansion and new developments in 2010.
That’s according to logistics and project specialist Bertling, which constantly tracks project developments on the continent, says commercial manager – sales and marketing, Isabelle Drouard.
It’s welcome news after a turbulent year in which the financial crisis was not the only challenge facing the project and logistics industry.
“Political issues and instability discouraged investors and resulted in project delays, while the strong rand was a further detractor,” Drouard told FTW.
“In addition, freight forwarders who saw business declining in the textile and automotive industries shifted their focus to cross-border business, including projects.”
But she believes the company is well-positioned globally to meet the increased competition “We can
respond to changes in the countries of origin for major components as we are most likely present there as well. Cross trade makes up a large part of our business and our expertise.”
The company has a network of 66 offices based in 38 countries.
“In Africa alone Bertling is currently engaged in projects in 19 different countries,” she told FTW.
These include a large coal mine in Mozambique, a gold mine in Eritrea, various copper mines in the DRC and Zambia, as well as mining operations in Ghana, Guinea and Mali.
For the year ahead, its priority is to increase its presence on the continent.
The company ventured into the DRC in 2007. “Now we are opening up in Beira and Tete and also have a permanent representation in Ghana in cooperation with a local partner.”
Investment in critical resources is key to the Bertling philosophy. “This is why we have two warehouses in Johannesburg, a fleet of vehicles that provide collection and deliveries locally and an investment in the running of a cross border truck fleet.
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Three new destinationson the schedule this yearIn a dual expansion plan
involving Qatar Airways Cargo and its parent company, Qatar
Airways, the combined service is offering an ever-growing service package to the mining industry and other air cargo users.
In an exclusive interview with FTW, Dileepa Wijesundera, senior vice-president of the cargo operation, noted that the 2009 expansion would be extended into 2010.
The highlights of 2009, he said, “included the launch of flights to Houston, Texas, the addition of Amritsar in the northern state of Punjab, and Goa as the airline’s ninth and tenth destinations in India.”
Probably the most noticeable addition of the year was on December 6 – a date which marked the launch of services to Melbourne in Australia, and added this island giant as a new continent in the network.
“This,” Wijesundera said, “is an exciting prospect, and one that opens up opportunities for existing customers in Europe, UK, Africa and the Middle East, as well as presenting new customers out of Australia with access to the airline’s network.”
Frequency increases have also played a major part in the expansion in 2009. This included additional flights to Athens, Paris, Stockholm, Zurich, Madrid, Lagos, Manila, Muscat, Kuala Lumpur, Algiers and Tunis.
The Doha-based flag-carrying airline of Qatar is currently due to add three new destinations to its flight network in 2010.
The information from Wijesundera revealed that daily flights to Bangalore in India would be launched in February, followed by a similar service to Ankara in Turkey and the Japanese capital of Tokyo in April.
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Three new destinationson the schedule this year
‘Investors need reassurance on return on investment’
route will take the airline’s number of weekly flights to India to 71 across 11 cities. The daily service to Tokyo will be operated via Osaka and the Seoul service, which currently runs via Osaka,
will become non-stop from the end of March.
It is not just a route number and flight frequency expansion, according to Wijesundera – but aircraft additions are also part of the plan.
“Qatar Airways confirmed an order for 24 Airbus A320 family aircraft at last year’s Paris Air Show,” he said, “and added them to the other 179 aircraft on order.
“This included five Airbus A380 ‘super jumbos’ which are due to start arriving in 2011. We will also see three brand new Boeing 777 freighters joining our present cargo fleet of Airbus A300-600 freighters.”
And SA is going to benefit from this busy growth programme, Wijesundera added, with Qatar Airways Cargo currently delivering to 87 destinations worldwide, but intended to increase to 120 destinations in the next five years.
Dileepa Wijesundera … from 87 destinations currently to 120 in the next five years.
Africa needs to improve mining legislation, says analyst
By Liesl Venter
Africa needs to improve mining legislation to provide certainty to investors that they will be able to recover their initial investment costs plus profit.
That’s according to Wonder Nyanjowa, Frost & Sullivan mining analyst, who says some African countries like Zimbabwe have not fully benefited from their natural resources because of the lack of clear mining laws.
As one of the key drivers of Africa’s growth, mining should be playing an increasingly important role on the continent, he says.
“Mining is an important industry for Africa not just in terms of economic growth but also as a creator of much-needed employment and to enhance the standing of the continent in the world,” says Nyanjowa. “The bulk of the world’s platinum, diamonds and ferrochrome is produced in Africa. South Africa has long been considered the global
centre of mining excellence.”And this should be used to the
advantage of the continent, says Nyanjowa. “Mining methods have been mechanised whilst supporting industries are sufficiently developed to meet the needs of the growing mining industry.”
In South Africa mining contributes some 8% of the country’s GDP – a contribution that rises to 17% if the multiplier effects of mining in downstream industries are considered. “Mining constitutes 15% of the supply and demand for energy in South Africa while about 96% of the country’s electricity is generated from coal,” says Nyanjowa. “The bulk of Zambia’s export receipts are from copper while Angola, Nigeria and Gabon’s economies are driven by oil. There is possibility and opportunity in African mining.”
According to Nyanjowa coal is currently the most significant attraction in South Africa given the expansion programmes at Eskom and Sasol.
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Owned network of facilitiesprovides the edge for haulage company
By Alan Peat
The mining industry has played a significant part in the project cargo
road haulage conducted by the major southern African trucking operation, Durban-based TCS Logistics.
According to MD Rogan Brent, the product it offers to mining customers and other road transport users is designed to follow the TCS motto: “Africa Just Got Smaller”.
“If you want to run a successful trucking operation in southern Africa,” he told FTW, “you have to extend your own tentacles into the neighbouring states with which you deal.
Four dump trucks moved from Durban to Chingola
Containerised cargo is TCS’s bread and butter, but it also has extensive business in hauling abnormal loads into Zimbabwe, Zambia, DRC, Malawi, Mozambique and Botswana.
JANUARY 2010 | 11
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“You have to create an owned network of facilities and people if you want to work your vehicle fleet in a self-controlled environment.”
Following this basic philosophy, his now 13-year-old company has established infrastructure in Durban, Johannesburg, Messina, Beitbridge, Harare, Lusaka, Chirundu, Mwanza and Blantyre – with offices and workshops at all these centres.
The total fleet – including Brent’s self-owned lowbed fleet of 10 rigs varying between 40 and 70-ton capacity – comprises about 200 trucks and trailers.
Some 85 of these – ranging from general cargo and fuel to abnormal load outfits – belong to TCS’s main contractor, the Zimbabwe-owned Tauya. “About another 100 that we manage belong to other dedicated subcontractors,” said Brent.
“Our bread and butter is, and always will be, containerised cargo, but we also have an extensive business in hauling abnormal loads into Zimbabwe, Zambia, DRC, Malawi, Mozambique and Botswana.”
Asked to highlight activity specifically directed at the southern African mining industry, Brent chose a heavy-haul conducted last year.
“We were awarded the movement of four Komatsu 930E dump trucks ex Durban to Chingola for a Zambian mining concern,” he said, “taking on the project under Access Freight Projects. Together, we executed the movement of the four massive machines flawlessly.”
The project took up a total of 36 truck loads – carrying four chassis of 50 metric tonnes each; the four rock bodies (cut in half for ease of transport); and the 4-metre diameter tyres, breakbulk cargo and containerised components.
When the vessel arrived in the Durban port on a Saturday morning, TCS had the 36 trucks lined up to receive the cargo – with the transport team headed personally by Brent.
“We worked non-stop from vessel arrival until completion of discharge to clear the holds,” he told FTW. “This included the welding of reinforcing and supports to the rock bodies for loading, as they are asymmetrical and very difficult to load.
“This project was one of the many carried into Zambia, DRC, Zimbabwe, Malawi and Botswana last year,” said Brent, “but this particular consignment was of particular significance due to the nature of this cargo.”
South African mining fast facts
SA holds nearly: 90% of the platinum metals on earth 80% of the manganese 73% of the chrome 45% of the vanadium 41% of the gold
Only crude oil and bauxite are not found in the country
SA is the world’s fourth largest producer of diamonds
SA supplies some 80% of the world’s platinum
SA was usurped as the world’s largest gold producer by China in 2007
Precious metals contribute 65% to the country’s mineral export earnings
The mining industry is SA’s biggest employer
SA is the world’s largest producer of chrome, manganese, vanadium and vermiculite
It is the second largest producer of ilmenite, palladium, rutile and zirconium.
SA is the world's third largest coal exporter. Two of the world’s biggest mining
companies – BHP Billiton and Anglo American – originated in South Africa
Source: www.southafrica.info
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Need for stock replenishment will drive industry growthBy Liesl Venter
Companies across South Africa will be looking at cementing their sources
of supply as highly competitive conditions make a comeback in the mining industry in 2010.
“This really means that 2010 will be a time of unique opportunities,” says Ross Barry, supply chain developer for RB Freight Management. “Increased demand will definitely be on the cards as manufacturing picks up. And as new resources, especially in areas such as middle Africa, are exploited, this will provide an opportunity for all involved in the industry to increase their share and profits.”
Already as the economy and trade grows, volumes have been increasing with companies changing their focus from local to international.
“We did not lay off during the recession, instead we hired and spent the downtime training and ensuring staff were well-versed in the systems
with the aim being to be able to deliver and be in a good position for post-recession growth.”
Barry says there was a significant increase in interest in new mines, re-opening of old mines and a general increase in mining and production towards the end of 2009. “This was due to consumers having used their stockpiles through the recession and stocks needing to be replenished. This trend is set to continue well into 2010 as companies and countries look to economic recovery and growth.”
Barry believes there are many opportunities in the industry – from finding new customers to being able to meet the new logistical challenges. “The mining company that can provide the correct quality and quantity required can get new business and revenue, and the logistics provider who can find low cost ways to move the product will benefit as well,” he says. “The port of Ngqura is basically sitting unused, but has the potential to be used for very large vessels, creating
a potential cost saving for the savvy logistics provider.”
Barry says there is no doubt that mining and minerals will become a more and more heavily contested industry. With the developed world fighting over African resources,
political sides may be chosen and outside influence will become stronger and more common. “African nations need to stand up and ensure they are not exploited and that the income from their natural resources is not squandered.”
Ross Barry … ‘In a good position for post-recession growth.”
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Namibia readies for mining industry upturnBy Liesl Venter
Namibia is gradually taking its rightful place in the mining and minerals industry as its
corridors become more competitive and its logistical efficiency increases.
The mining industry started to recover during the third quarter of 2009 and expectations and indications are that 2010 is going to bring about some real opportunities, says Philip Coetzee of Manica Namibia business development.
“There are substantial opportunities for Namibia as the origin or transit route for commodities like uranium, copper, coal, and manganese. Project and abnormal cargo for new plants and mining equipment for Namibia as well as other SADC countries discharged in Walvis Bay are becoming more frequent and bode well for the future,” says Coetzee.
And with their vast mining knowledge and the increasing availability of infrastructure to handle these types of cargo, Namibians are grabbing the opportunities coming their way.
Says Coetzee: “Namibia has been fortunate in that its logistics infrastructure is also utilised for cargo destined for neighbouring countries like Angola, Zambia, Botswana and the Democratic Republic of the Congo.
Trade volumes moving into these countries showed a decline during the earlier part of 2009, but since the third quarter of the year an increase has again been experienced.”
Namibia, like the rest of the world, was not immune to the world economic crisis that saw a downturn in prices, crashes in stock prices and major reductions in the demand for commodities. This in turn resulted in several expansion plans being delayed, budgets revisited and new projects put on hold.
“During the recession the focus definitely turned to cost management,” said Coetzee. “The challenge in the near future will be to secure contracts for current projects, but more importantly expansion or new projects. Funding is still difficult to obtain as share issues fund most of the new projects from new companies. The current value of shares linked with market perception makes this one of the more challenging issues in the industry.”
Coetzee says sustainable and cost-effective supply chain solutions for both imports and exports need to be tied up as the synergy between these two can lead to substantial savings in the industry. “The vital link is the balance between commitment from the mining houses and infrastructure development by the service providers.”
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Zambian Copper Belt gets back on its feetCopper price almost stable again
By Liesl Venter
The Zambian Copper Belt is once again alive – and kicking.
This follows an extremely rough year which saw copper prices plummeting and several mines having to close their doors due to the global economic meltdown.
With hundreds of Zambians losing their jobs on the mines, the country found itself, like its neighbours, facing a crisis.
“We suffered just like many other countries around the world,” says Chrispin Chiinda, director of Cee Cee Freight & Suppliers, a customs clearing and forwarding agency and a representative of several transporters and consolidators from South Africa. “Mines either closed or downscaled, and people started feeling the pinch as retrenchments set in. Copper is extremely important to our economy and as the copper prices dropped the impact on the country became worse. I think we will all remember
2008/2009 as the period in which people had no income as their jobs were made redundant.”
But as the world started recovering, so did the copper price and so did Zambia. “Already one can see the change as people seem to be finding their feet again. The copper price is almost stable again and people are back at work trying to regain the losses,” says Chiinda.
He says on the Copper Belt there is activity again and mine companies have started re-employing labour.
“The mining industry is extremely important to Zambia. It is one of the largest employers other than government and the agricultural sector. We are expecting to see a boost in job creation in the coming months as mining activities increase again.”
He says the most important lesson for Zambia during the recession was to be aware of being overly dependent on the mining sector. “It has become clear we need more
investments in other sectors of the economy to survive if another global crisis should hit. It is the challenge
for us as a country, and possibly Africa as a continent, as we move forward into 2010.”
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Chris Chiinda ... diversification is the challenge for Africa.
JANUARY 2010 | 15
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‘Mine to furnace’ service for exportersMegafreight and Freightmax in co-ordinated programme
By Alan Peat
Two sister companies in the mighty Imperial Group have combined their muscle to
offer the Southern African mining industry a full package of services right across the domestic and international export supply chain.
As part of the deal, the warehousing and distribution specialist, Freightmax, ties together its rail logistics and general freight business divisions to offer mining companies bulk product rail movement from the mines to the port of Durban.
“One of the advantages of using rail transport from the mine’s siding to our own siding,” said Brian Giddey, MD of Freightmax, “is that it gives the mining industry a better carbon footprint than using the alternative road transport mode.”
At the company’s general freight premises – some 2.4-kilometres from the Durban container terminal (DCT) – these bulk products are
stockpiled waiting for the customers’ export instructions.
“At this stage,” Giddey added, “we can pre-load the containers (used for the international leg because of current cost advantages) waiting for the stacks to open.”
This is where sister company, the clearing and forwarding (c&f) operation Megafreight, takes the stage.
According to Durban branch manager, Paul Munn, the customer’s instruction for so many tonnes to be exported triggers a co-ordinated programme between Megafreight and Freightmax.
“We get Freightmax to organise the appropriate tonnage,” he told FTW, “then we organise the booking of slots on the container ship, complete the customs and port documentation, then oversee the containers being loaded on to the correct vessel.”
Munn also pointed out that, although clients normally handle the freight movement at the other end
of the international leg, Megafreight – with its international network – is also capable of handling the cargo movement in the destination country.
“Between our two companies and the group we have an awesome capability for completing both the domestic and international legs,” he said. “This allows us to offer clients a complete ‘mine to furnace’ service as far as their export needs are concerned.”
Megafreight and Freightmax are currently moving large export tonnages of chrome, lumpy or fines, copper and manganese.
This, they told FTW, is either from local SA mines, or cross-border from Zimbabwe, Zambia and Botswana.
“The furthest,” said Munn, “is copper from the Copper Belt in the Democratic Republic of Congo (DRC).”
Moving large export tonnages of copper.
16 | JANUARY 2010
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BRIC countries will drive next commodity boomMines on care and maintenance will be reopened
Busa stands firmly by pro-competition stance
Despite the recent slowdown and consolidation in the mining industry, the outlook remains bullish.
That’s the view of Willie van Graan, business unit head – mining at global insurance broker and risk management company Aon.
“As the economic situation stabilises and improves, mines currently on care and maintenance will be reopened,” says Van Graan. “Over the next five years we expect the next commodity boom to be driven by the expanding BRIC countries (Brazil, Russia, India and China),” Van Graan told FTW. “Exploration will have to become a focus again to ensure that no delivery
bottlenecks occur when the world economy enters a new growth phase.”
The recession has affected the industry in diverse ways. “Smaller exploration-type companies backed by private investors have started to be absorbed into established junior mining companies. As a result these smaller companies and marginal miners are being replaced by bigger more secure junior mining companies.
“The major players slashed exploration budgets dramatically during the financial crisis and focused energies and resources on projects that were producing. Mines that were not profitable or were marginal
were put on care and maintenance. However, a turn in the economy will bring about the reopening of these mines followed by renewed exploration activity.”
With the diamond price dropping by 60% in just six months in 2009, diamond mining companies have been operating at very small margins or have become loss-making companies. The spot prices for platinum, iron ore and coal also dropped significantly and this has resulted in massive job losses in the industry. “For the insurance industry, the job losses haven’t really affected the asset insurance of mining houses except maybe for business
interruption insurance that was cancelled for operations that were put on care and maintenance. Whether an operation is on care-and-maintenance status or operating at full capacity the assets need to be insured,” said Van Graan.
For the future, Africa remains the world’s largest untapped resource pool and a lot of the future exploration activity that will start after the global economy recovers will be focused on the continent, in Van Graan’s view. “The African continent will therefore be a major area of growth for all mining-related support services including insurance and risk management.”
Malema fuels debatefor nationalisation of mines
By Liesl Venter
The call by ANC Youth League (Ancyl) president Julius Malema for gold and
platinum mines in the country to be nationalised could make for an interesting debate, according to Busa deputy chief executive officer Raymond Parsons.
Speaking at a press briefing on Busa’s forecasts for 2010 in Johannesburg recently, Parsons said if Busa were ever confronted with a choice between nationalism and competition, it would choose competition.
“If you want a healthy economy you must have more competitiveness
in that economy.”Parsons said looking at all the
major studies conducted in recent years on the South African economy, while also taking into account countries that had nationalised mines, it was maybe a worthy debate.
“Business, however, would not depart from the point of view that competition is healthy and necessary.”
Malema has been extremely vocal in recent times that mines in the country should be localised. Speaking in December at an SA Students Congress at the University of Kwa-Zulu Natal, he was quoted as saying it was not a difficult process to transfer mines from private hands to the state.
“This is happening in Botswana, where De Beers are in partnership with the state. The state owns 60% of its minerals and De Beers even pays tax.”
He said South Africa should be looking at profitable minerals as the ones to be targeted first. “Platinum, which is easily found in Rustenburg, is still very easy to mine because it is still very shallow. The same applies to
coal in Witbank,” said Malema.“We are told we are going to scare
the markets if we continue talking about this issue. If the markets want something they will stay. Markets continue to go to countries where there are civil wars.”
Malema has admitted that he may not be an economist, but insists that when it comes to mining the state should have the controlling stakes.
Julius Malema ... ‘Not difficult to transfer mines from private hands to the state.’
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