Here is a conundrum to ponder. In the posting from yesterday (see posting below this one,) I write of why Vancouver has so many Junior Mining Companies. Here is part of a private email I received from some-body commenting on what I wrote. The author of the comment wishes to remain unnamed:
I know one of my South African colleagues, a grey head in the mining business, would comment, with tongue in cheek: “Canadians are brilliant at planning, but when it comes to execution they are found lacking…….and obviously need South Africans to turn it into reality!!” Typical South African humbleness….I am of personal opinion it’s got to do with your neighbors love for venture capital / stock exchanges, lack of regulation on juniors and easy access to mining rights in Canada. My observations on Canada, are that juniors are welcomed, but big internationals need to know their place and not upset the status quo. (BHP Potash takeover) In South Africa, on the other hand, I get the sense that juniors must know their place and big internationals are welcomed. Maybe it’s got to do with overheads, long lead times for permits and that African states rely on big companies to participate in infrastructure and social development? Or might it be that Americans in general are so naïve and greedy that they just keeping giving money to juniors in Van?
The writer raises, seemingly in jest, many points of great significance. Let us try to comment on a few—-and recall I am originally of South African origin.
When I was in South Africa in mining, there were five big mining houses (companies.) They dominated the scene. They employed the best. Some of my friends had talented fathers who were important engineers in those imposing structures along 44 Main Street (the Anglo Building.) My father was a mere mine captain on an obscure East Rand Mine called East Geduld.
Some of my university friends joined the big mining houses and rose to do great work. I recall both Tom Lloyd and Ken Llyle with admiration. This concentration of talent no doubt lead to the success of so many South African mining ventures. There was money and gold in the ground to succeed. And there was a long-term perspective.
By contrast, the average Vancouver junior mining company can bearly pay the owners and promoters, net alone employ expensive engineers and even more expensive consultants. All too often they do it by the seat-of-their-pants.
In South Africa, in mining as in most walks of life, we were part of a powerful, privileged, conservative class. There was no thought of individual success for oneself only. It was all for the nation and the Volk. That was drummed into us at school, in the newspapers, and on the state-controlled radio. (No TV least it corrupt the Volk.)
By contrast, in Vancouver it is all individual. The individual may try for themself, succeed or fail on their own accord, be a rich man or a poor man, according to ability and adventure.
In South Africa mining was done according to strict formulas, in known geology, and with full support of the state that needed money to support the system and the military and conscription. By contrast,in Vancouver it is all individual effort using available resources,
I could and should go on. There are many reason for the differences. But at this point I was interrupted for a discussion on project status and lost my train of thought. Maybe you can comment and add to the debate.
I agree with both, but especially the email commentator. The cultural differences are probably more important than we think on the service – i.e. greedy, risky capitalists in North America versus the headstrong traditionalism of mining in South Africa. But I too, am flying from the seat of my pants making this description!
I know nothing of the political dimensions of mining in South Africa, but I hope to God it is more productive of an environment than here in the USA (Alaska to be specific!). I think Vancouver is situated historically and geographically in a perfect position for the promulgation of junior’s. As you said, nobody wants to stay in Vancouver all the time (isn’t the weather crap?) but it’s a great place to go for a few days or weeks!
My impression of South African mining is an industry where the big players have built their businesses on the backs of almost slave labour, where labour was cheap and fatalities were commonplace…is South African mining history much different than Chinese mining today?
The supposed greed of North American’s is what supports the venture capital business. While mining is one benefit of the willingness to take chances, oil & gas, high-tech, are also benefits of the same ideal that investors are willing to invest in guys who have a good story and maybe be able to advance a business rather than simple investing in guys who can lower 20,000 men underground.
South Africa – gifted with incredibly high grade and continuous deposits and a massive, cheap and expendable work force that has been at the beck and call of the elitist society. This model has been in decline since a great humanitarian helped the rest of the world realize that it was criminal.
It’s easy to execute when you just bark orders and everyone jumps.
There are a lot of grey hairs in the industry that can’t figure out why things have changed
My question is: why can’t we also pay the miners decently and give them some shares for a profit-sharing model of sorts? Thinking globally here as cheap labour is a problem in many parts. I have no problem making money through mining for all parties involved (as I invest and have made money myself primarily through mining stocks and pp’s) … but the vast poverty of many miners leads to situations like the strikes in Chile and elsewhere. How many millions are being left on the table because of that? Is this completely unrealistic? I don’t know – any thoughts?