South African Mine Woes Grow
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  • Eric

    Perhaps the RSA politicians should read this article in The Economist about the actual prosperity in Ulaan Baatar resulting from the mining developments in the south of Mongolia.

    “UB is a boom town on the frontier of global mining. Hotels are bursting; the Irish pubs, of which there are several, are heaving with foreign miners, investment bankers and young local women with very long legs and very short skirts. French bistros serve steaks the size of tabloid newspapers. Dozens of cranes punctuate the skyline. The streets, empty 20 years ago, are now clogged.”

    I can say as an Aussie who is living in a coal mining area that mining is the only thing making us the luckiest of lucky countries in the current global financial gloom.

    At the same time in the UK they are complaining that companies are sitting on a cash pile of £731.4bn. They are doing that because there just aren’t projects which meet their risked hurdle rates of return. One commenter rightly says “You do not invest where you see considerable economic or political risk. You do not invest as an act of charity or with the intention of destroying shareholder value.”

    South Africa take note. You want golden eggs guys? Then keep your geese happy!

  • Gary L

    For more than a decade, the following link has been my primary source for South African news:

    OK, so it’s not exactly Alan Paton, but anyone who follows the comic strip Madam and Eve – SA’s answer to Doonesbury – will have a pretty good grasp of South Africa’s current political and cultural situation. The 2/7/12 strip addresses Melema’s suspension.

  • Toni

    “Worth noting: mining is a business in which foreign investors make very large fixed capital investments in hopes of a long term return.”

    So too is oil and gas. Companies can make multi-billion-dollar investments — in extracting the sludgy oil beneath Venezuela’s Orinoco River basin, say — only to have the ambitious, grasping likes of Hugo Chavez expropriate it. Oh, companies were thrilled to find oil off the coast of West Africa, “off the coast” being a place rebels and politicians have a hard time commandeering.

    Even if South Africa chooses to imitate Ulaan Baatar instead of Venezuela, companies will rightly be leery of investing large sums. The specter of expropriation has been raised and (think the companies) the specter might yet turn into the real thing.

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