Diamonds aren’t forever – not in SA

January 23, 2011

It was announced that DeBeers, the South African Company that dominated the global Diamond Market for yonks has decided to throw in the towel as far as South Africa is concerned and it was no surprise that they sold their second biggest and one of only two diamond mines remaining in South Africa.

The decision to sell Finsch Mine was an easy one. De Beers, years ago decided to get out of the country. Mining, because of labour (COSATU) and government (ANC) became too expensive and the margins to thin. The risks of tenure and other regulatory uncertainties curtailed exploration and the decision was made to sweat the assets and get out leading to the mass sell-off of mines. The Kimberley mines were the first to go with the BEE-company taking them over, KCM – loosely connected to the Zuma clan – recently suspended from the JSE. The Cullinan mine was taken over by Petra and are barely surviving – albeit at a much smaller scale with considerably fewer people than before – thanks to the find of a typically massive and “lucky” gem; luck that cannot continue for much longer.

Finch Mine does not have the luxury of huge and lucky gems. The mine depends on the mass production of cheap industrial diamonds and small low value gems. Petra no doubt will reduce the size of the mine and scavenge dumps and easily accessible ore of which there is little left. Going deeper will require huge investment, investment DeBeers baulked at for good reasons.

The sad thing is that in 2005/6 Finsch Diamond Mine became one of the most technologically advanced hard rock underground mines in the world; a true pioneer. The technology employed at Finsch was critical in ensuring the viability of sustainable continuing operations.

Because of the South African skills shortage it became increasingly difficult to support the advanced mining technology at Finsch mine and future investments in this technology became just too risky given the deviancy of the Department of Minerals. In the end the selling price of Finsch Mine of $200 million hardly equates to the cost of the Mine Automation Project.

Sadly many of the excellent engineers developed in this process have left South Africa. They work abroad for DeBeers and for the companies involved with DeBeers in the development of the technology.

With Finsch gone, Venetia Mine remains the last Bastion of the erstwhile DeBeers South African Empire, in South Africa – an empire destroyed by transformation. The mine will be retained by DeBeers until the easy resources are exhausted, the assets have been sweated properly upon which it will be flung aside to be used by unscrupulous BEE companies, like KCM, to fleece unsuspecting investors.

Resources are not inexhaustible and for that they must be recovered effectively and investments must be made in finding new resources. In South Africa this cannot be done because of inflated labour costs, ineffective training and education, a government threatening ownership, a ruling party prepared to steal mineral rights for the benefit of a select few in the top party echelons.


The Great South African Mining Disaster

February 24, 2010

Nic Holland, upon taking over at the helm at Goldfields, vowed to close down working places considered a safety risk. Being a man of his word and having the integrity of an old-style accountant he carefully assessed the risks and duly started shutting down workings considered to risky. Having not done the “Mining Math” properly in the first place, he found, perhaps too late, that he will eventually have risk free operations. That was however not the only reality that dawned upon him – he also found no risk means no gold and after all, that is what Goldfields is all about – mining gold. With every risky place they stopped the gold output fell inexplicably; A difficult concept? Not really. Most call it common sense. As the saying goes; you do not make scrambled eggs without breaking a few eggs.

Nic Holland was not the only one trying to get rid of the “risky” operations. Anglo American’s Cynthia Carroll went a bit further and sold all of AngloGold Ashanti, getting rid of a whole whack of dangerous operations in one foul swoop. She went further and then publicly claimed a massive reduction in mining related fatalities at Anglo – a novel variation on the concept of selling your problems to the uninformed – in this case selling your deaths, sweetened with a splattering of gold to the unsuspecting foreigners. Fortunately in this case the foreigners got a bit more than a smattering of gold with the Africa operations that came with the South African assets. My reckoning; if Julius and friends succeed in nationalising the South African mines with compensation the foreigners can get rid of the South African poison pill – the deal of a lifetime.

As this drama continues to unfold, South African mining production continues to fall sharply. At a time when the gold price is at its most favourable in decades, South African gold production has reached an all time low of 232 tonnes, less than half the 490 tonnes produced in 1985 and falling ever faster. Ironically, as the gold production from South Africa was dragged down by labour issues, government regulation and risk aversion, output from the rest of the world, particularly the rest of Africa and China rose sharply.

Looking at the latest round of reporting by mining companies, it is particularly noticeable how many companies reported a great number of production days lost due to safety issues a new inclusion in their reports. As in the case of Goldfields, the South African mining industry will come to the realisation that the easiest way to ensure no risk is to shut the mines down.

With the loss of 15 000 jobs in the mining industry in 2009, a year when resource prices were showing a recovery  from the global recession with the gold price reaching an all time high, South African mineral production continued to fall.   

Having said that, it is particularly noticeable how the cause of accidents and the reasons for Section 54’s, Mine closure orders, are glibly attributed to the owners and management. When an incompetent and reckless miner, holding a certificate issued under the auspices of the relative government department, blows himself and his colleagues up by smoking in an area which he has tested as being laden with methane, management is blamed, the mine is closed down and the bad and twisted – by the Union and the Department of mineral Resources – publicity, loss in production and subsequent revenue loss accrues to shareholder.

No wonder Patrice Motsepe is so keen to give his mines to Julius Inc., compliments the South African taxpayer. He learned from Cynthia Carroll.


Little Lies

February 10, 2010

It is disconcerting the manner in which everybody, from the President, including ministers and Chief executives, twist and distort facts to suit their little agendas. Even worse, is the manner in which they proudly tell their convoluted truths, not in the slightest concerned that their reputations may be harmed should they be exposed?

The same people who claim they are adhering to all principles of good governance unleashes their half truths on a public, punch-drunk from being bombarded by nonsense espoused by the pillars of society.

I am not talking here about politicians from the governing party or even politicians in general. We have come to expect lies and deceit from our politicians. Truth be said, we are disappointed and feel robbed if they fail us in this regard. No. I’m speaking of Cynthia Carroll, upstanding leader of the once mighty Anglo American.

Desperately fighting for survival, the once hailed saviour of a faltering organisation – like the legendary Phoenix or using an example closer to home, Shabir Shaik – rose from the ashes and flattened delegates at the annual Mining Indaba, when she proudly announced a staggering safety performance at Anglo American.

According to Carroll, Anglo reduced the fatalities resulting from mine accidents from 44 in 2006 to 19 in 2009, an improvement of 42% over three years.  A remarkable achievement, unless you dig a bit deeper to find that Anglogold Ashanti, responsible for 32 of the fatalities in 2006 are excluded from the 2009 figures by reason of Anglo American’s disposal of that asset in 2007.

Looking at current Anglo operations it should be noted that fatalities at Anglo Platinum remained flat at 17 – 18 fatalities through 2006 to 2008. In 2009, with fewer people employed and more of their production and revenue coming from joint ventures, resulting in lower risk, fatalities decreased to 13. A reasonable performance? Yes. Spectacular? Not in my book.

What it does teach us is to tell a convoluted story, peppered with twisted facts omissions and half truths. You may get away with it for a while, fooling even the so-called experts and informed. However at some stage you will be caught out and people will snigger when you make your profound statements; some may even tell you to your face that they feel insulted by you underestimation of their intelligence.


A Travesty and a Fairy Tale in One

January 20, 2010

And so the wheel eventually turns, or perhaps I should say; “As the stomach turns”

 It feels like yesterday when NUM members took hostages at the Two Rivers Mine in an attempt to reinforce their noble attempts at transforming the mining industry. The action by NUM at the time was not surprising, after all, one could say they invented and perfected the art of underground hostage taking. As a matter of fact, I am surprised that they, like the taxi drivers in the case of taxi routes, do not claim intellectual property rights.

Be it as it may, a rival union, on the self same Two Rivers Mine, has now had the audacity to infringe on the irrevocable and sole right – bestowed on NUM by the leaders they proudly spawned, Mantashe and Mothlanthe – to take hostages on mines.

To make matters worse and more insulting, the hostages taken are NUM members, more likely than not, the same people responsible for the previous hostage drama at Two Rivers. No wonder then the exasperation of NUM officials condemning this travesty of justice.

I could not help thinking about an hostage taking event not so long ago which has subsequently become the stuff legends are made off. The legend goes;

The Emperor and the Miners

Once upon a time at a Platinum Mine – in the far west of a country, well known for its dancing emperor and Clown Prince, the ruler saving money by multitasking the prince to fulfil the role of court jester and stand-up comedian – the workers, having been told, by the emperor that they were special and feeling they were entitled to all the riches of the platinum mine, an idea mooted by the Clown Prince, decided to cease work until their wages were higher than in any other place in the world.

The workers, quite rightly, believed they were solely responsible for bringing the ruler to power and anyway, he did promise them wealth and comfort beyond their wildest dreams should they carry him to power. The workers fought hard and dirty and got the emperor to power and this was payback time.

Much to the shock and surprise of the workers, now refusing to work in support of their demand for their promised rewards, the evil Mine Boss dismissed them, banished them from the mine banishing them to a life of hardship, a life without DSTV and washing machines. The Evil One brought in other workers; workers who promptly and without hesitation took over the meaningless jobs with great proficiency. Imagine the confusion, humiliation and surprise of the Banished, having been chased away like worthless dogs, witnessing the cockroaches that have been begging for jobs day-in and day-out at the mine gates, taking the jobs that rightly belonged to them, the members of the guild of miners, who swept the Emperor to power.

They were understandably upset and appealed to their guild and the Clown Prince and the Emperor to assist them with reinstatement but to no avail, because friends of the Emperor were also friends of the Evil One. When they saw there was no deliverance from the fate delivered upon them, they slinked back to their houses. There they lay about, drank beer frolicked with their wives, when mentioned wives returned from the fields, where they were trying to eke out a living.  However during lonely moments they, the Banished got together and counted there remaining and fast dwindling cash resources with great concern.

And so it came to pass. Whilst they were sitting around drinking beer and bemoaning their financial woes, having realised the money promised by the Emperor for the unemployed was barely enough to buy food, a scary short little man of demonic appearance arrived, as if out of nowhere, in their midst. This little man of much power declared himself to them as the Tokoloshe – master of malevolence

The Tokoloshe, having listened to doleful lamentations, presented them with a plan so evil, it almost froze the blood in the veins of the bravest warriors amongst them, one of them, Funa Pumile, so-called because of his urge to rest often, afterwards swore the HIV viruses in his body instantly died. The Tokoloshe as is his want, did not only give them a plan, his servant, dressed in a splendid blue uniform, not dissimilar to that worn by the Emperors Police, gave them short sticks that fired very small arrows at great force and velocity. One of the banished workers fired a test arrow at the wall of his hut to find his recently born baby as dead as a dodo. Strong muti indeed.

The Tokoloshe also had his personal witchdoctor at hand and he promptly supplied the banished workers with a potion, made from wondrous herbs blended with body parts of the now dead baby using a machine – borrowed from a workers kitchen, they haven’t reached the pawning phase of hardship yet – blessed by Russel Hobbs himself, to give them immense strength and make them impervious to the weapons of their enemies.

After drinking their potion, mixed with copious amounts of alcohol, and smoking lots of magical herbs the banished and rejected workers proceeded to the mine with sticks, dancing and singing, jubilant in the knowledge that they will regain their positions, and more. After all, did the Clown Prince not ask for the seizure of mines by the people? Did the emperor’s councillor on gold, gems and fabulous mineral wealth, not threaten the evil mine owners to fit-in-or-fuck-off? They marched with the knowledge that, as in the past, their ruler expects them to act strongly and take, with necessary force and commensurate trashing, what is rightfully theirs.

Soon after they arrived at the mine, whilst they were singing and dancing, summoning the great spirit of the Machine Gun and focussing their minds, now slightly befuddled by a haze of intoxicating herbs, a few rotund policemen, not dissimilar in appearance to Mr. Plod, good friend of Noddy, arrived and prevented them from approaching the Evil One where he was sitting in his sumptuous office sipping coffee and counting his fortune.

Having recognised friends and allies amongst the police and not wanting to hurt friends, they used tactics taught by the Tokoloshe and some of the Emperor’s advisers many years ago and staged a fake retreat. The police, not seeing any killing opportunities, promptly withdrew, signalling the opportunity for the banished workers to attack and breach the defences.  

And children, that is what they did.

They broke through the barriers of steel and concrete and proceeded underground. There they secured an area and promptly proceeded to, using the skills passed on by guild leaders and Emperor’s advisors, construct pipe bombs using pipes and explosives liberated underground. They secured a comfortable area, not to cold and not to warm, a suitable sleeping place, for those that do not have watch or bomb making duty, where they could dig in so to speak.

Once they secured their control centre they did what they do best underground; they promptly went to sleep, all of them except one, a man by the name of Katalile Minadagiwa, who, due to his inability to participate in logical debate and being a fan of the Clown Prince, having studied every speech ever made by the crown prince, was chosen to negotiate with the Evil Owner.

In the meantime, the police were called back and arrived with the police’s newly trained special forces, flown in by special jet, in tow. Whilst the suitably obese police commissioner shouted instructions, Katalile spoke to The Evil One on the telephone, demanding the presence of the ruler, the Clown Prince or the big cheese of the guild. 

Whilst this hullabaloo was carrying on the task force proceeded underground armed with rifles, grenades flame throwers and all manners of violence perpetrating equipment, to back up their newly acquired licences to kill, proudly displayed on cards contained in a little pouches hanging around there necks. Positively professional, reminding somewhat of the ID tags of conference-delegates, all very smart.

Yes children; they were ready and well prepared to marinate, tenderise and roast their adversaries. The scene was set for an epic battle. A fight to death – a battle for the hart and soul of the economy.

The first bomb was set off by the rebel miners, a policeman was pole axed by shrapnel from the pipe bomb and all hell broke loose. After the lapse of a suitably long period of time to justify the description of ‘epic battle’, surpassing in length and intensity of the well publicised turf wars of the Zama-zamas having produced a sufficient number of wounded on both sides, the begrudged miners were subdued and hauled away to be drawn and quartered by the Emperor’s men, at the behest of the Evil One, who, it was learned, made a sizeable contribution to the “Welfare of the Emperor” fund.

The mine owner subsequently liberated his money and moved it to a far of land with an honest Emperor and peaceful hard working people. There he started a new mine and became immensely rich.

The Clown Prince became bloated and fat, and his head – like a black hole, dark, empty and dense – imploded and he became rather pleasant blabbering incoherently day in and day out in the process, driving the Emperor insane, prompting him to embark on a crusade against fair-weather friends.

The mines in the once great land quietly died and the workers returned to the land where they tried to eke out a living and eventually succumbed to famine and pestilence.

Ed. What a load of non-sense. You certainly have a wild imagination


Mining…Killing for Profit?

July 22, 2009

The tragic accident, in which nine miners were killed, hangs like a shadow over an industry, which, for many reasons, has become less and less competitive over the years, an industry that can now only be described as an industry in crisis. The sad part is that, before any investigations were done the fingers were pointing and blame was apportioned, mostly to management and owners. In reality, the South African culture of risk-taking and the low value placed on life by sectors of the population are, with the inherent risk of mining, the main causes of fatalities in SA mines. To suggest mine owners “Kill for Profit” is ridiculous and a reflection the intelligence of those prescribing to the idea.

 Apportioning Blame

Solidarity was quick to point to the poor safety performance of the South African mining industry in comparison to mine safety performance in developed countries such as Australia, Canada and the USA. Such comparisons do show that mining in South Africa is eighteen times more likely to kill you than it is in Australia. It also shows that we are ten times more likely to be killed on the road, driving to the killer mine, than in Australia. However, the likelihood that you will be murdered before you get into your car is 60 times higher than it would be in Australia. It is ironic that we measure mining bosses against the highest safety standards in the world but we are quite happy to compare our road safety and crime with against the worst standards. It is quite in order for Ministers, Government Officials and others responsible for Transport, Road Safety, Safety and Security and Health facilities to be compared against lower standards

Why are we surprised when we hear about another mine death?  How does the owner’s desire to profit from mining contribute to the death of the risk takers in underground ‘’accidents’’?  How will the call for imprisonment of owners and/or management prevent accidents caused by people with such attitude to safety and risk?

What is surprising in all of this is the denial of any responsibility and accountability, for any accident or injury of any kind, by workers representatives, in particular the NUM. We never hear of the union member who took a shortcut thus putting his colleague in danger. The recent hostage drama orchestrated and executed by reckless Union members, placing lives in danger, yet exonerated by NUM is a prime example of poor attitude. Media reporting of fatal injuries in mines has become emotional and sensational thus making reasoning around mine safety issues emotional and not analytical.

Because of these relentless attacks on management and mine owners, we have reached a situation where the call by unions, for draconian measures such as exorbitant fines and imprisonment, are actually considered by the Minister. When gross and deliberate negligence exists, any reasonable person will accept the suggestion of drastic measures against anyone found to be negligent. This rule should however, not only apply to management and owners, but also to workers who cause injury or death. Perhaps a worker killed as result of his own risk taking and negligence, should forfeit any insurance payouts to his family. A draconian measure? Most certainly, but so is putting someone in jail because someone died on a mine for which he is responsible because of the negligence of another. As it is, mine owners have taken drastic measures against senior executives in response to poor safety performance. Unions on the other hand, will fight the sanctions against their negligent and reckless members with everything in their power.

Mining is Risky

What is largely being ignored in the media and in the public domain is the simple fact that Mining is inherently risky. Deep level labour-intensive mining as practiced in South Africa is particularly hazardous and the best way to make these places perfectly safe is to stay the hell out of there and opt for subsistence farming. The main risk attributing factors are the physical operating environment, which include geological features, geophysical and geothermal factors. Other, often more critical and manageable, factors include skill, culture and behaviour of employees (including management, supervisors and workers) and finally engineering factors such as machines, chemicals and tools.

Certain pursuits are inherently more dangerous than others, an undeniable truth, to expect mines to be comparable to a bank, as a place of work, is absurd. To expect police work to be free of risk to life is equally absurd and people accept it as such.

The impact of people factors, experience, training and culture, on our poor safety performance, are largely ignored and are therefore not adequately addressed. The reasons why these issues are seldom highlighted are legion. Suffice to know, due to affirmative action, global skills demand in the resource sector, coupled with poor education and sub-standard training; we have a dire shortage of technical skills at all levels. Given the inexperience of supervisors and managers, we should consider ourselves lucky that we do not kill more people in our mines. The South African mining industry operates in one of the most challenging mining environments in the world and does so with a poorly equipped human resource pool. Even China, with their atrocious mine safety record; operate their mines utilising a higher worker skill base.

Risk Takers

South Africans have a death wish and no respect for life. We see it in everyday life. Driving from Pretoria to Rustenburg, a while ago I noticed, at an informal settlement, the concrete fence separating it from the N4 to safeguard and prevent inhabitants from making dangerous road crossings. Despite the erection of four pedestrian bridges, the inhabitants have chosen to break the, very substantial, fences and now cross the busy highway in the face oncoming traffic. Most of the people living in Majakaneng are employed by the surrounding mines and the person employed by a mine in the area is, most likely, the person that makes the hole in the fence and takes the risk to make the dangerous and illegal crossing of the road.  I cannot think of any reason why this risk taker will change his behavior when he goes underground to work.

High-risk behaviour of South Africans is inexcusable. People doing this, can only be stupid and lazy.  The second reason could be that there is a lot of truth in the perception, that South Africans have a “life is cheap”-culture.  A third reason is a culture of risk taking that can be linked to the “life is cheap” culture.  We see this behavior in many aspects of the daily life of South Africans.  It is evident in the way they use the roads, the risks taken when people make illegal electrical connections to the power grid. We see it in schools where violence is the order of the day with children attacking each other with the intent to kill and the popular “Train surfing” in the township, which is a dangerous equivalent of Russian roulette. Many South Africans do not value life and they show scant respect for their lives and the lives of others.

We see risk taking and a total disregard for life beyond the workplace and the roads. Only in South Africa do people, diagnosed with Multi-drug Resistant TB (XDR-TB), escape from hospital to go home and effectively deliver a death sentence to family and friends. Only in South Africa do they pass HIV/Aids on with gay abandon. Only in South Africa do witchdoctors kill hundreds of teenage boys in traditional initiation rituals.

 The Way Forward

The South African mining industry spends more money than any other South African industry on training and education. It is in training and education where government and labour can contribute greatly to the reduction of risk to life and limb in mines by becoming party to genuine training initiatives put in place by the mining companies. It is however important that their participation are based on genuine desire and not political agendas and ideology of a few individuals. The role of government should be one of coordination and legislation whilst labour should assist in pressurising the freeing up of funds tied up in ineffective Setas and assist management in setting up workable and effective training programs after effective and valid analysis of industry needs. Establishing proper training will add more to mine safety than astronomical fines and criminal charges.

To continue to blame mine deaths on an owner/management drive for profit is mischievous and counter productive. It impacts negatively on the problem and efforts to improve the situation. The current approach of apportioning blame, by the unions and the DME, are counter-productive. Mine owners, for many years, have been monitoring the cost of accidents.  They have concluded long ago that the cost of accidents erodes profit and impacts negatively on the image of mining as an investment option.


An(c) Economy of Lies

July 21, 2009

             

ANC party secretary-general Gwede Mantashe yesterday announced that the ANC national executive committee, which met at the weekend, has decided to refer the nationalisation debate to its economic transformation committee, which will then develop the party’s position on the matter.

 In three weeks, we saw this unfolding drama develop from a position of “No nationalisation of Mines to the current position.

Malema, at an ANC Youth League conference three weeks ago, called for the nationalisation of mines, invoking the requirements of the “Freedom Charter”. He was quickly backed by Vavi, Cosatu, Vavi and the SACP.

Gwede Mantashe, in his capacity as Secretary General of the ANC reacted, saying that; “Nationalisation of the Mines are not on the ANC agenda”. Susan Shabangu said a few days later that state owned mines are a possibility.

The youth league reiterates its demand for Nationalisation, again backed by Vavi and Cosatu.

Gwede Mantashe in his real skin as President of the SACP makes another one of his famous U-Turns and agrees to that Nationalisation should be considered. At the same time, Duarte tells the media that the ANC will have a national debate, one of those things we hear about but never participate.

Susan Shabangu, to confuse the market, says Nationalisation will not happen, whilst Zuma agrees with the idea of a “National debate”. On Sunday, ANC policy academic and MP, Professor Ben Turok assured all Sunday Times readers that there is no possibility of nationalisation of mines.

I am sure, as with the replacement of Mboweni with hard line Communist Gill Marcus, many commentators will call this a positive development. The only possible positive spin-off will be the closure of mining companies filled with BEE leeches and no economic right to exist

Does anybody know who is in charge? This is a very strange development in the light of the President’ Assurance that the country is not governed by trade unions. To me it seems the tail wags the dog, or is this “Rule by Confusion and Lies”.

Two weeks ago, that great proponent of truth from ANC ranks, Carl Niehaus referred to the science of lying as perfected by politicians the world over, a science in which our ANC and government do exceedingly well and can justly claim world leadership. Honest Carl proudly told us he never told lies as spokesperson for the ANC, he just used the “Science of Spin”. Was Carl perhaps “spinning a yarn?” I, for one, do not see the difference in blatant lies and spin. What I do know for certain, is that the ANC and its partners and therefore the government of the day is particularly adept at lying. Lenin’s doctrine, which is not out of place for an organisation with a strong communist influence, like the ANC, teaches; “Lies told of enough becomes the truth”. In the face of this double-speak a fitting and well-applied principle of Mr. Lenin’s teachings.

As for the owners and investors, they will not go the marginal mines; they are after the rich ones. For those who expect fair compensation, dream on, there is no money to compensate you for your investment. What will the owners and investors do? They will quietly move their money out and minimise risk.


Of Crocodiles and Mines

July 13, 2009

I am not sure whether I should be sad, bemused or angry. The hostage drama at the Crocodile River platinum mine near Brits has to stand out as another extreme act of sadomasochism by the “entitled proletariat” under the guise of the “poor oppressed worker”

To understand the issues and dynamics of the situation it helps to have a bit of a background of events leading up to the crisis. The existence of this mine in itself is a minor miracle, having changed hands five times since it came into existence in the mid eighties. The mine has been profitable for very short periods and only when the platinum group metals were at extremely and unsustainably high levels. Currently the mine is not profitable and are burning cash in the hope that the platinum price will pick up, the rand will weaken or hopefully both. Should this not materialise, the mine will probably close before the year-end. The  current situation will, most likely, expedite the eminent mine closure and resultant job losses at this company built on hope and prayers.

 During the checkered history of the company, few people made money. Those who made money can thank good timing, luck, greed and good marketing. Some who owned the mine during the years were able to sell their “asset of dubious value”, to often poorly informed, and over-optimistic investors, “high” on platinum price euphoria. The current owners represent a considerable number of ill-informed Canadians since the company is registered in Canada with its trading in Toronto and Johannesburg. This can be interpreted as a subtle warning to the few stupid investors out there who, despite the Fraser report, are still investing into South African mining projects.

In order to keep the mine going, management I believe, took a number of actions to preserve cash thus prolonging mine life in the hope that the platinum price will recover. The objective of these actions is to recover losses and to make profit. As a result, people remain employed and suppliers are paid. Actions taken, I believe, included the reduction of development, necessary to open ore reserves for longer-term sustainability, the removal of the mining contractor responsible for operations and taking over the work force from the contractor, thus removing waste from the value chain.

 It is the ex-contractor workers who now hold people hostage demanding permanent employment on a mine making a loss but with the clear intent to keep them employed as long as humanly possible.

These “entitled” elements in our society are intent on biting the hand that feeds them. They are quite prepared to go and lie at home and breed once they have destroyed the business. Unfortunately, this action is the result of a strike culture that permeates South African society. A culture perpetuated by unions in their power struggle against the market economy. The union of course, denies that their members are holding hostages. Anyone believing this assertion is incredibly naïve taking into account that the union involved is  the National Union of Mineworkers, the same lot that is holding the country hostage with the 2010 soccer stadium gun against our heads.

It is ironic, were these poor hostage holding strikers stuck underground because of a power failure or other technical reason, the union and the DME would have been extremely critical of about management’s disregard for miners’ safety. It must be understood, dangerous situations in mine can only be created by management. The “experienced, intelligent and highly perceptive worker” will never expose himself to danger

With the Pamodzi case still fresh in our minds the astute thing is for Crocodile River Management to cut their losses, stop the bleeding and get the hell out of there. One just wonders how many companies must be closed down by irresponsible unions and their members before sanity will prevail.

 There are few winners here. The investors, with few lucky exceptions, will lose their money, the employees will lose their jobs, the strikers and hostage takers deservedly so and suppliers will have to write off what is owed to them.  The BEE partners, who obtained their stake in the company at a discount, may not loose and probably already took their profits at the expense of workers and real investors. The Union will be walking away, smiling and flexing their collective muscles after another “well-deserved” victory for the left and a body blow for sanity.