• SA cities need foreigners

    We need to protect our cities' cosmopolitan nature, says Mzwandile Jacks.

  • Am I a racist?

    Does hating government's arrogance, nepotism and greed make me a bigot, asks Anton Ressel.

  • Recipe for disaster

    Malema's flames of frustration are fuelling white extremism, says Leopold Scholtz.

See More

The problem with profit

Jan 29 2013 09:21

(File) (Shutterstock)

Company Data

Anglo American Plat Ltd [JSE:AMS]

Last traded 302
Change 6
% Change 2
Cumulative volume 351509
Market cap 0

Last Updated: 17-04-2015 at 05:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

The profit motive

Amplats, govt consultations 'constructive'

Strikes take toll on Anglo output

Anglo 'stole our money' - Mantashe

Unions must act on Amplats job cuts

Miners face bleak future as job cuts loom

Fin24 user Bernard Lawrenson has commented on Mzwandile Jacks' column The profit motive:

"The problem started when uninformed people, including think tanks of the ANC, equated the holding of mineral rights to the withholding of valuable assets that should be in the hands of the state and be immediately turned to account for the benefit of the people," says Lawrenson.

"The use it or lose (it) approach to mineral rights was intended to mobilise these resources for the immediate benefit of the nation as a whole."

In  his column, Jacks says: "I think the motive behind this whole thing (the decision by miner Anglo Platinum [JSE:AMS] to lay off 14 000 workers, close shafts and sell a mine) is profit for investors or shareholders."

Responding to this, Lawrenson writes: "The fallacy in this view was thinking that profit seeking capitalists would sit on anything that was capable of generating profits without good reason.

"The mining houses' execs, who knew from bitter experience that metal markets were cyclical and subject to the laws of supply and demand, saw these unused bottom drawer potential resources as currently ranging from marginal to pie in the sky resources and concentrated on meeting market demand and research aimed at market expansion.

"The unintended consequence of the use it or lose it legislation was an expansion in production, as resources previously considered marginal were put into production to the extent that mining houses in desperation persuaded themselves in a boom period that this was profitable.

"Some previously tied resources became the basis of BEE deals. The balance fell into hands that raised new capital to exploit the envisaged bonanza. The sheer pressure of across the board expansion put capital costs through the roof, destroying mooted returns.

"A quadruple rise in costs over a 10-year period has provided the 'coup de grace'," concludes Lawrenson.

 - Fin24

Something on your mind? Send us your story and you too could get published.


Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

anglo platinum  |  myfin24


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Must see! The most luxurious dog house!

This dog house comes with a treadmill and hot tub, you have to see it!


Luxury living

Exciting new luxury SUV arrives in SA!
Ridiculous demands people with too much money make
8 of the priciest places to dock your yacht

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Government’s call for the private sector to add power to the grid is:

Previous results · Suggest a vote