Children Grow Up

If you can remember, back in the early part of 2013 when faced with platinum industry cutbacks, the South African Mines Minister Susan Shabangu commented” I see myself as the parent to the mining industry and when the children get out of hand, the parent has a responsibility of bringing the children back in line”. We highlight these comments as the South African platinum strike enters its 16th week. What has been surprising about this strike, aside from is length, has been the inaction on the part of the Government. Statements by the three major producers would indicate that while they are willing to meet the unions part of the way, even a partial conciliatory move does not make long term economic sense. The unspoken commentary behind these moves on the part of the producers is that the days of subsidizing money losing production is over, and the Government better wrap their heads around that. The juxtaposition of these strikes and the general election would also indicate that the ruling party had no interest in promising something it could not ultimately deliver(no permanent job cuts). Perhaps the lesson that Ms. Shabangu, and others, will learn over time is that while the resources may reside in the home country, the monetization of such resources depend on adequate payoffs for both sides.

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