Tough Love

The comments by South African Mines Minister Susan Shabangu, in response to the most recent job cuts by Anglo Platinum are indicative of a shift in governmental resource oversight. Ms. Shabangu comments were as follows ” I see myself as a parent to the mining industry and when the children get out of hand, the parent has a responsibility of bringing the children in line” These comments are provocative in and of themselves, however they are even more so given that Amplats made their recent jobs decision based on escalating costs at the mines in question combined with relatively low platinum prices. If the threat of nationalization ranks among miners greatest concerns, then the prospects of turning ones mining assets into one big public works project must rank right up there as well. If private companies are not allowed to make economic decisions based on profit seeking motives, then governmental actions to quell such efforts can only be termed ” nationalization-lite”. If companies are not given the leeway to adjust production based on the current environment, then the only difference between these regulatory handcuffs and outright nationalization is who is responsible for the financing of the actual production.

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