Andru Mining

Source: Energy Digital

Date :03/07/2008 16:42:05

A welcome change

Written by John Lambert and Produced by Alex Smith

Gauteng-based contractor Andru Mining (Pty) Ltd has quite a reputation. It has worked on many high profile projects and is looking to capitalise on current opportunities within the mining industry.

Currently responsible for a variety of open pit contracts, including several coal mines, two chrome mines and a silica mine, it has worked for the likes of AngloGold Ashanti and Xstrata, as well as other major blue chip clients for whom it supplies manpower on a tender basis. Famous works include the renowned Townlands, Bankfontien and Kroondal projects.

Andru has undoubtedly benefited from reform in the South African mining industry, and to understand why, it is important to examine how the industry has evolved.

A modern South Africa

South Africa is today a leading producer for nearly all of Africa’s metals and minerals production apart from diamonds, uranium, copper and cobalt and phosphates. Up until recently, it was the world’s largest gold producer - a position it held for over a century.

Although it has since been surpassed by China, gold, once a keystone to the South African economy, has diminished in importance as the country’s economy has diversified.

South Africa boasts an abundance of mineral resources and is one of the world’s most important mining countries in terms of the variety and quantity of minerals produced.

Exec has often referred to South Africa as Africa’s treasure trove as it has the largest reserves of chrome, gold, vanadium, manganese and platinum group metals (PGMs) anywhere in the world. Remarkably, experts believe there is still considerable potential for the discovery of other world class deposits in areas that have yet to be fully exploited.

Transformation

Much like everything else in the country, the mining industry in South Africa has seen significant restructuring and changes since the fall or apartheid. The traditional big six (Anglo American/De Beers, Gencor/Billiton, Goldfields, JCI, Anglovaal and Rand Mines) were all restructured.

These companies traditionally controlled gold, platinum, chrome, coal and base metal production, but the arrival of the new democratic constitution and rising costs from gold mining activities resulted in several changes.

The old mining houses were phased out accordingly, which opened the door for consulting engineers serving the mining industry to be involved in projects which were previously the domain of the mine owners themselves.

What’s the story today?

The clear trend of the modern South African mining industry is to outsource much of the engineering work. This means mining houses no longer have to carry the overhead of permanent engineering staff when they are not engaged in projects.

There is also a move within Government towards accommodating small mining companies, creating opportunities for junior operations to start up.

These have all been extremely positive steps forward. However, regardless of any progress that is being made, transformation is still a key issue facing South Africa’s mining sector.

Black empowerment

We are all familiar with the fall of Apartheid, but the battle for equality remains, particularly in industries like mining, which are dominated by whites. Still, the country is progressing and a new democratic culture appears to be taking hold; however, the transition is slow and much more needs to be done.

At present, reports suggest that around 70 percent of the mining industry’s labour force is black, while less than five percent of managerial positions are held by black people.

Many businesses are doing their bit to encourage equality – mostly through empowerment schemes, but more clearly needs to be done.

In response, new government targets have been set and, by 2009, all mining companies will be expected to have 40 percent of managerial positions held by previously disadvantaged South Africans.

Other targets include the transfer of 26 percent of mining assets to black-owned companies, and ensuring that 51 percent of future mining projects are controlled by black-owned firms.

Foreign investment

The entry of foreign investment into South Africa has been slow since the country’s first democratic elections in 1994. This has been due to a variety of reasons. However, the situation is changing and many junior exploration companies are now active in developing several small to medium scale operations, mainly in diamonds, gold and platinum.

Canadian Southern Era was an initial success story with the opening of the Klipspringer diamond mine as well as Australian Aquarius Platinum that has opened the new platinum mine Kroondal, which Andru coincidentally played a part in.

A vital industry

Mining is crucial to South Africa, with precious metals contributing 65 percent to the country’s mineral export earnings and 21 percent of total exports of goods in 2006. The country supplies about 80 percent of the world’s platinum.

The mining industry is also South Africa’s biggest employer, with around 460,000 employees and another 400,000 employed by the suppliers of goods and services to the industry.

The future of the industry is bright and mining contactors everywhere are looking to capitalise on the available opportunities.

The clear trend to outsource much of the engineering function has been hugely beneficial for businesses like Andru and as mining houses no longer have to carry the overhead of permanent engineering staff, this looks set to continue.

Although it presently only works in open cast mines, Andru Mining will be looking to diversify this in the future – a future which looks very bright indeed.

Click here to view the corporate brochure on Andru Mining