Oh, oh, a silver lining!

There’s bad news on the platinum front: AngloPlat’s output has fallen by a quarter. But, says Business Report, there’s a silver lining:

Power cuts and flooding cut platinum output by up to 24%

Cape Town — Power cuts and flooding had resulted in refined platinum production falling as much as 24 percent to 428 600 ounces in the quarter to March, compared to the same period last year, Anglo Platinum said yesterday.

But the power shortages at local platinum mines, which dominate global production, has had a silver lining, as platinum prices shot through the $2 000 (R15 172) an ounce barrier earlier this year to reach a record of $2 255 last month.

Wonder if they’d write the same about food producers. “Bread output is down by a third, and milk production is 25% lower. Lucky their prices went through the roof, so company financials won’t suffer too much.”

(click here for rights and purchases)Maybe it hasn’t occurred to this reporter that the PR spin from AngloPlat, that price increases made up for production losses, is just that: spin. If they had kept production up, the price would still have increased (albeit by a bit less, perhaps), and AngloPlat results would have been significantly better. You want to sell into rising prices, not sit on the sidelines while your competitors do. Without the production losses, investors would have earned more capital appreciation, which they could have re-invested, which would have improved South Africa’s current account balance, and which would have bolstered overall economic growth.

Instead, the jobs and incomes of mineworkers have been put at risk by lower output. Silver lining? That AngloPlat’s numbers are reasonable despite its inability to exploit rising prices? Tell that to unemployed miners when they can’t put food on the table next month. Perhaps the mineworkers can send a press release to Business Report saying that their second quarter calorie-intake was worse than expected, but in the context of higher unemployment levels in the broader economy they didn’t do too badly, and there’s a silver lining: at least they don’t have to risk the mining safety issues Anglo Platinum management has attributed to the power cuts.