Bernard Swanepoel, To The Point
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» Village Main Reef could be more than just a gold company - Bernard Swanepoel
» The return of Bernard Swanepoel
» Deposed Harmony boss turns up again
» Harmony's Swanepoel lost the plot
» Swanepoel would form new company

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Commodity price downturn will spring skills
Allan Seccombe
Posted: Tue, 05 Aug 2008

[miningmx.com] -- THE skills shortage in the global mining sector could ease if there is a sustained pull back in the prices of some of the major mineral commodities, said Bernard Swanepoel, the former CEO of Harmony.

Swanepoel, whose new company To The Point is making a takeover play for a JSE-listed shell called Village Main Reef Gold Mining Company, said people had been lured to smaller companies by enormous salaries, but this could all change if the market changes.

“If commodity prices come down a lot of people currently sitting in brand new positions will become available,” Swanepoel said.
a lot of people will be back in the market
As commodity prices peaked so did the demand for skilled workers, he said.

“The market became completely skewed,” he said. “If any one of the big commodities goes into bit of a downturn a lot of people will be back in the market.”

Swanepoel left his role at Harmony a year ago. He quipped the Swanepoel family was going to celebrate “Freedom Day” to mark the anniversary of his departure.

He put in a big punt for coal during a brief speech at the International Mining in Africa conference in Johannesburg.

“Over the next 18 months coal in South Africa is a no-brainer,” he said. “The rational and irrational things about coal excite me more than any other commodity.”

“If you are not playing in coal in South Africa you’ll miss out.”

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Demand for coal in South Africa is an almost certain bet as power utility Eskom ramps up more generating capacity by de-mothballing coal-fired power plants and builds new ones. South Africa is also the largest supplier of coal to the European market, so there is an export market, which generally commands a premium in prices.

Swanepoel has coal, gold and platinum assets he’d like to vend into Village Main, he has said.

He said there were an estimated 1,000 coal exploration permits in South Africa and this provided an opportunity for consolidation, in much the same way there are some 34 platinum juniors, but it’s unlikely they are all going to bring mines on stream.

Swanepoel said value was created in tough times such as the market is currently finding itself in, with juniors battling to raise funding. “I like the down phase of cycles.”

Gerard Kemp, the head of the Pamodzi Resources Fund, said the private equity fund must have looked at some 90 opportunities in the South African coal sector but either, as in the case of the Waterberg, the infrastructure was lacking or they were too expensive.

“There are a lot of people on a lot of steroids out there. It’s just crazy and they have this huge expectation that everything is going to go up and generate huge returns,” he said.

“We think normality will come back in about a year’s time. There’s not a lot of money out there. Banks have stopped providing debt to mining companies and if they do it’s very expensive and onerous,” he added.