Every Friday morning, SAfm’s AMLive’s radio anchor Xolani Gwala speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Gwala: South Africa’s exciting new local iron breakthrough is expected to hit the commercial ground running.
Creamer: This is tremendous news. Since our World Cup in 2010 there have been entrepreneurs beavering away at a mountain of iron potential in Palabora, Limpopo. This is the magnetite dump that has been built up over decades. Metallurgists have gone in there and failed. In have come these entrepreneurs and they are going to turn this to account. They are talking about beginning to trade profitably from next month.
What we are talking about is not having to mine iron-ore which is a real job, this iron is already on the surface on this dump. The dump is nearly 60% iron. What they have done is that they are going to convert this into a new iron product in a way that is very efficient, because they don’t need a lot of electricity. In fact, the off-gasses from this process actually create the electricity for the process. At the same time they turn out a product that is three times more valuable then iron-ore.
They are not just getting dirt there. That then goes into a big demand area, which is iron making through the electric arc furnace way, which is very popular throughout the world at the moment. Instead of having to use scrap, they use this iron briquett, which they produce in Limpopo.
It is now on the point of also influencing South Africa, because the Industrial Development Corporation (IDC) has taken a 33% stake in this plant. We know that they are also looking for that sort of product at Scaw Metals, which they also have bought. So interesting scenarios in the iron field.
Gwala: Mozambique is surprising on the upside with a big new high-value iron aspiration of its own.
Creamer: This is another high-value iron aspiration. People are not looking to just transporting it out, they are looking to adding value. We don’t expect that in neighbouring Mozambique because we think South Africa is obsessed with beneficiation.
Along come these Australians, listed in London and AIM and they have gone into Mozambique and found iron-ore. We don’t associate Mozambique with iron-ore, we talk about coking coal there and a lot of other activities through the Cahora Bassa scheme. What they looked at is this low-cost electricity from the Cahora Bassa, which is also clean, their own iron-ore, which they are mining plus, because there is so much coal mining there now, there is dust-coal that they can get at very low prices.
They are going to use that coal instead of the expensive coking coal, they will use the thermal coal, which is almost a waste coal on a dump, which means they get it at low-cost and this is now creating the economics for a pig iron development.
Similar to what is happening in Palabora, but this time pig iron also replaces scrap in this electrical arc furnaces in this steel making where there is a lot of demand and you get three times the price that you do for iron ore. You also get a premium on the normal scrap.
Gwala: The Botswana government is pulling out all the stops to attract non-diamond mining investment.
Creamer: Non-diamond investment in mining is what the Botswanan’s are doing. They had another conference this week calling investors. What they are saying is that they are luring, enticing and even goading you to come in here.
They will look at their tax-regimes, but investors need to come in and need to do mining other then diamond mining. We see since 2005 they have got a new gold mine going there, plus two copper prospects which are being turned to account. They are a little bit unhappy with the pace, because we had this big meltdown in the world where a lot of exploration went by the board.
They are also very hopeful for coal, because they have got about 212-billion tons of coal in resource there, but there are logistical problems there which means that some of the diamond miners are saying to them that they are moving away from diamonds too fast.
This was John Teeling of Botswana Diamonds persuading them to continue to look for diamonds but to change their tact. Up to know they have used De Beers technology to look for diamonds. What Teeling is saying is to use the Russian Alrosa technology. He finds this technology phenomenal.
This technology can see through the sand down 100 metres, because it is used to being used in the Alrosa area where it has found 17 hard-rock mines. What they don’t tell is that they don’t only say they can find the kimberlite, but they can find a diamondiferous kimberlite.
Botswana Diamonds has got a big area of 200 km2, and they have narrowed it down to 4 km2 and said drill here and you will find diamonds. He is saying that government should still stick with diamonds, but they can diversify, but not forget about the diamonds because there is new technology available.
Gwala: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back with us at the same time next week.