We can’t ignore the economics

2015-08-12 06:00

IF low commodity prices push our mining industry into a potential bloodbath, careful decisions have to be made in South Africa.

Firstly is the realisation that economics is at fault, not the mining companies that budgeted for platinum prices staying at $1 300 an ounce and it is now heading to only $1 100.

To avert any loss of employment, the miners need either to increase production or lower their wage demands until prices recover, or the mines will simply close and then there will be no employment possible.

I know that expecting any SA union to agree to lower salaries is more improbable than expecting the precious minerals to mine themselves, but these are unfortunately the only options remaining.

Nationalising the mines is not viable, as look at the Eskom, SAA and other SOE bailouts.

If the once-profitable mines require taxpayer bailouts then citizens will simply refuse to pay any taxes, our economy will collapse and anarchy will reign.

Economics is a mathematical reality that just does not care about humanity - we either work with it or be destroyed by it.


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