I THINK MINING

Bush started the rot: issuing presidential orders to keep the grumpy (and angry and vicious) old men on his right happy.   Now Obama promises to reverse many of these orders to quickly put his own stamp on things.  Personally, I find all this executive action scary.  And here are some more very scary statements from a speech by Ms. BP Sonjica at the South African Minining Seminar during the 10th China Mining Conference, Beijing, China.  Imagine what she could do with an executive order?

In the past, the remedy prescribed by Bretton Woods Institutions amounted to the Structural Adjustment Programme (SAP), the pillars of which, also known as the Washington Consensus were fiscal austerity, privatisation and market liberalisation. Emerging governments were forced to reduce government expenditure, to remove government interference in financial and capital markets, to do away with all support to agriculture and to rely on the private sector for the provision of transport, fertilisers and other support to small farmers. I would however, take the opposite view and argue that State intervention is necessary for development to take place, because development requires not “less State” as the Bretton Institute would contend, but “better State” action, characteristic of a developmental state.

Experience in Asia and recently in China shows that the opening up to outside competition must be gradual and carefully sequenced. I further contend that this crisis requires smarter State participation and that it is not more regulation of the industries, but better regulation that will nurture sustainable and predictable global economic growth.

 

How one defines better regulation as opposed to more regulation, I do not know.  Particularly as it applies to mining in any country.  Except, we have one example:  China last week said no more mining investment outside China; open new mines right here in China.  Now that is better!

Except poor Ms. Sonjica gets twisted about this.  She says in nice diplomatic language:

I am confident that a number of excellent interventions between our respective governments will go a long way in addressing the challenge of a trade balance skewed in China’s favour.

The global economic developments have been tougher than expected this year, essentially underpinned by significant economic slow-down in the developed economies, fuelled by the propensity of most executives to accumulate wealth for themselves in a loosely regulated environment.

This situation was compounded by the speculated “cooling” of China’s economic growth prospects. Many developed and developing countries are experiencing unprecedented inflationary pressures, indicative of challenging economic environments within which we operate.

I am not sure she meant to say “speculated.”  Garbled verbiage for sure.  Maybe she meant “speculative,” less nice but more accurate.  Hey, she talks better than Palin!

Thus my advice as often before:  leave investment in Africa to the Chinese and their scruples, the British and their imperial attitudes, and the Africans who will take it all any way.  There never was and never will be room for decency in that dark place.