All these idiots had to do was let LONMIN fail. They were too concerned about a few jobs lasting a bit longer though. Long term - there is huge doubt over the need for platinum and no matter what profit these mines "make," labour and government will devour will devour it all over time - de facto socialism. Why on earth would you nationalise mines when you can get the shareholders to carry them and keep the existing management and funding structures in place - all the while silently stealing the asset anyway!(?)
If they don't do anything.. The investors will eventually pull out.. I mean who invests to make a guaranteed loss.. Allowing the market to dictate prices is a recipe for disaster.. The market is filled with speculators and they can keep prices erroneously low for prolong periods of time even if demand/supply indicates otherwise
Our tax money was used to bail out LONMIN. The effect of this is that all of the platinum counters in which we, the taxpayers, are invested will be hammered ie. they used our money to wreck our savings in order to save a few jobs and score a few votes. This economy existed before platinum! YES - cost of production is the only determinant - it was government policy that the assets be distributed to every tribe in sight. Of course this made these assets sub-economic on a standalone basis! BUT platinum prices were high and that is what they wanted. Will they now compel ANGLO to buy them back(??)
As for controlling the price - just look at iron ore and oil. The big boys drive out the smaller ones through greater economies of scale. That has always been the way. LONMIN failing would be a natural effect in correcting the market. Constant government intervention won't prevent this. There is plenty of platinum stock out there. There is plenty of palladium available. Recycling is also feasible if you take the prices up too high. Anyway - who says that these mines can afford a stand-off where users eat through there stocks while waiting for the artificially raised prices to ease. There bills are monstrous. Again - if they had just let LONMIN fail - the market would have been a long way further down the road to finding balance. Capitalism = drive out the competition and make hay in the good times. Anyway - our government frowns upon cartels - don't you know? BUT only when it suits them I'll warrant!
Yes - the competent, fairly paid government workers whose income is adjusted to allow these pensions. The same people who, allowing for the adjustment in their salaries and at yesteryears superior growth rates, will consume our entire GDP by 2020 or some such. This is your taxes put to good use.