NOW TRENDING OIL !

 Oil is now trending as surprising as this now sounds.   Oil has clawed its way back and it now is less volatile and likely to stay above $...

About Me

Retired but always looking for new challenges.

Thursday, March 1, 2012

The Stripping of South African Resource Assets Part 1

The old National government before 1994 had many ills
Its seperate development was totally unacceptable to many white South Africans as well as indigenous population.The major mining groups and major industry also opposed it.It took many years of persuasion and sanctions to bring about change which was finally a good thing.
How ever there were many good policies in place to keep the mines operating for longer periods and keep all the population employed at livable wages.
This is no longer the case.
Lets examine how this state of affairs has arisen.
1.First there was a gentlemans  agreement between the major miners and the government to not mechanise all operations except the dangerous and very heavy work areas and employ as many workers as possible.This has now changed and 860,000 jobs have been lost since 1994.Overseas first world countries are also guilty of encouraging these practices of mechanising all operations.
2.As the population becomes more frustrated at not having work and few new jos are being created the radical element is gaining support amongst the mainstream populace.Take the firebrand Malema and members of his ilk.Although he has been removed from political  influence for the time being ,opinions are obviously moving in the direction of nationalisation.
This is now bolting the mining sector.Overseas investors are not keen to invest money,in mines where it might be seized at some future time.
3.Now the government has come up with legisation which is now enforced ,which states that the land belongs to the government and mines have have lost the right to own their claims.The land they lease from the government is on a basis of "use it  or loose it!"The government's  policy is shifting on this issue and have been known to give the same land to different mining groups ,leading  to many challenges in court.This lead to many mining enterprises mining uneconomical reefs just to hold on to their claims.
4.Pre 1994 to take an example gold mines used to mine the lower paying reefs when the price was high and the richer reefs whenthe price of gold was low.ALL TYPES OF RESOURCE MINES OPERATED IN THIS WAY.NOW THE POLICY IS TO MINE THE RICHEST REEFS FIRST IN CASE SOME
NEW LEGISLATION SHOULD MAKE MINING UNPROFITABLE.
EVEN COAL MINERS ARE MINING THE BETTER QUALITY COAL SEAMS TO MAKE SOME PROFITS EIRST
5.ADDED TO THIS IS NEW MINING TAXES MAKING MINING AN ONEROUS BUSINESS.
6.ILLEGAL STRIKES by mining union for rediculous reasons might be the final straw that breaks the camels back now occuring more regularly.
Overseas governments should find it in their own interests to discourage some of these practices where they still have influence.