paulhunterjones

On August 5, 2010 a horrible accident occurred at the San Jose mine in Chile. As the miners were about to eat lunch the walls began to collapse around them. They were trapped a mile below the surface with no way out. Mine officials and the miners’ families feared the worst. It was possible that the miners were in the danger zone when the accident occurred. The international community joined the Chileans in praying for the miners’ safe rescue. Mining officials on site quietly expressed their view that the missing miners needed a miracle to have survived the collapse.

Seventeen days later the miners, their families and national and international well wishers had their miracle; the miners had been found alive, though weak and hungry. The miners found probes that rescuers had drilled down to search for survivors. Using the probes the miners sent messages back up to the rescuers. Communication with the miners had been established. Chilean Undersecretary of Mining Pablo Wagner cautioned that it could take four months for a hole big enough could be drilled to remove the miners. Later it was discovered that the mine walls were too unstable to allow large scale rescue operations. The initial euphoria slowly turned to despair as rescuers realized the daunting challenges that they faced to free the miners from their soon to be grave.

In a rare display of international cooperation and assistance a plan was devised to rescues the miners. Once the proper equipment was on sight and the rescue plan had been fully discussed and agreed upon, the miners began rising to the surface in small one-man capsules. After two months of confinement almost a mile below the surface the first of the miners set foot on the surface. The accent vehicle was called the Phoenix and was paint in the colors of the Chilean flag. Specialist from NASA, an international team of drilling experts and millions of dollars made the rescue of the trapped miners a reality. Thousand of miles away people watch on their television sets or the live feed on their computers the rescue of each of the thirty-three miners. When the last miner stepped out of the ascent vehicle a relieved world let out a collective sigh.

Though the Chilean miners escaped their tombs in waiting underground mining is an extremely dangerous business. Although mine safety has improved over the years, tragic accidents still happen with the lost of life. It is believe that globally about 12,000 miners are lost each year. According to the International Labour Organization (ILO) mining employs around 1% of the global workforce but it generates 8% of work related fatalities. China and Russian seem to be the exception to the global improvement in mine safety and a reduction in fatalities. The statistics indicate that developed nations normally have better safety records than developing nations. The experts believe that this is because unions are stronger in the developed nations. It is argued that unions insist on mine safety and advocate the well-being of the miners. In less developed nations unions are either weak or marginalized in the political and economic process. In the less developed countries if a miner complains about mine conditions or general miners’ safety he will most likely be out of a job.

South Africa (SA) is the world leader is mining and refining platinum group metals (PGMs). The world’s largest deposit of PGMs is located in Marikana which is located in Western SA. The owner and manager of this platinum mine is Lonmin Plc (Lonmin). The company was organized under British law in 1909 as the London and Rhodesian Mining Company Ltd. Today Lonmin’s principal headquarters is located in the South African city of Johannesburg with corporate offices also located in London, England. The company is seen as one of the world’s largest producers of PGMs. Lonmin engages in the exploration, mining, refining and marketing of PGMs.

The global automobile industry requires platinum to manufacture catalytic converters (CATS). These devices control toxic emissions produced by internal combustion gasoline engines. Almost every government requires auto manufacturers to install CATS on the vehicles they produce to cut down on air pollution. Almost all present day automobiles that run on gasoline are fitted with a three way CATS to reduce toxic emissions. Without the converters the toxic gases would be expelled directly into the air. CATS are also used on generator sets, forklifts, airplanes, locomotives and other machinery that is used everyday. Lastly PGMS are used in making high-end jewelry.

About two weeks ago South African (SA) platinum miners lost their lives. The dangers that these miners faced was not located deep underground but above ground. When the miners lost their lives they were not working the mine because they had called an illegal strike. On the day in question their demonstration for higher pay and safer conditions, unfortunately, turned violent. On August 17, 2012 at South Africa’s Lonmin Marikana mine 34 striking miners died in clashes with police and mine security forces. The violent confrontation left another 78 persons injured. It would be an understatement to say the loss of life was tragic. The YouTube video of the confrontation between the police and the miners is graphic and disturbing. A police officer can be heard shouting orders to his men to stop shooting.

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Once again Greece stands at the exit door of the Eurozone (EZ). In the past Greece’s possible exit had been discussed in hushed and guarded terms. The conversations behind the public displays of support for Greece indicated a growing impatience with the country’s failure get its finances in order. Quietly European leaders and financial institution have considered different scenarios that might result from a Greece exit from the EZ. United States banks and American financial companies have moved to limit their exposure if Greece defaults. Hundreds of lawyers and financial advisers are reviewing legal documents and agreements in effort to protect their American clients’ interests. A Greek default would cause a wave of litigation which US companies hope would be heard under New York State or British law and the cases heard in friendly venues. More importantly; the banks do not want to be repaid in devalued currencies or worthless drachmas.

I have always argued that the EZ should not become involved in expensive and futile rescue attempts of the Greek economy.

Greek Prime Minister Antonis Samaras recently traveled to Germany and France for consultations with his counterparts over Greece’s implementation of the agreed upon austerity measures. The Greek leader’s coalition government was only formed upon the agreement that the country would renegotiate the terms of the bailout agreement(s). Most Greeks are weary of the imposed austerity measures that were agreed to in exchange for having their economy rescued from default. The recent Greek presidential election was a protest vote against the austerity measures. Though the leaders of the more economically stable EZ countries have voiced support for Greece’s plight, there has never been much hope that the bloc would renegotiate the bailout agreement. PM Samaras’ was tasked with requesting from his counterparts a two-year extension for Greece to carry out the required cost cutting. The measures are needed to qualify for the next 33.5bn-euro installment of its second 130bn-euro bailout. With the EZ teetering on the brink of another recession and other EZ members requesting bailouts, it might not have been the best time for Greece to ask for its money without having complied with the terms of the agreements.

The first high level meeting on PM Samaras’ schedule was with German Chancellor Merkel. The Greek leader had to appreciate the difficulty of his task in convincing the Germans to give his country more time to comply with the terms of the bailout agreement(s). Chancellor Merkel is credited with having successfully argued for the EZ’s austerity measures strategy of resolving the Europe’s debt crisis. After the meeting the two leaders held a joint new conference. PM Samaras stated the following in front of a gathering the international press:

“Greece will stick to its commitments and fulfil its obligations. In fact, this is already happening…We’re not asking for more money…(Greece) needed time to breathe”.

The German response did not surprise anyone; no decision would be made on Greece’s request nor would additionally funds be released until the Trioka’s September report has been received and reviewed. Chancellor Merkel reiterated her emotionally empty support for Greece’s continued membership in the EZ. She expressed Germany’s position in clear and concise terms:

“For me, it’s important that we all stand by our commitments, and in particular await the [publication of] the troika report, to then see what the result is…But I will encourage Greece to follow the path of reform, which demands a lot of the Greek people.”

Some experts suggest that Ms. Merkel spoke in conciliatory terms to prepare Germans for continued financial support for Greece. I disagree with this interpretation of her comments. Volker Kauder who is the leader of Chancellor Merkel’s political party stated that he had not problem with Greece exiting the EZ. The comments from leaders and financial experts, taken together, indicate that the Germans have grown resentful of mortgaging their future to rescue the economies of other member nations.

PM Samaras next arrived in France for face to face consultations with French President Hollande. The Greek leader again requested a two-year extension for Greece to implement the necessary cost cutting measures. I am sure that PM Samaras believed that President Hollande would be more understanding of Greece’s plight. President Hollande was recently elected to his office based on a platform of promoting growth versus cost cutting and austerity measures. The French leader expressed understanding for Greece’s difficulties but indicated that the country must carry out the austerity measures. President Hollande also said that any decision on Greece’s request would have to await until the September report of the Troika. It is a given that the Troika’s report will conclude that Greece has not made any real progress on implementing the requested measures. The Greeks must realize that they, likely, will not receive any more bailout funds.

During his trip to Germany and France PM Samara’s failed to get any meaningful concessions for his tired and angry countrymen. It is inconceivable to me that he would have expected to receive more time to put Greece’s finances in order and, at the same time, received additional bailout funding. His mission was doomed to fail from the start. It must be remembered that his coalition government is built upon Greek resistance and anger to the austerity measures. The massive street protests cannot be explained away as isolated incidents of discontent. The Greek PM had to go to Germany and France on his hands and knees to ask for some breathing room. It is possible that Samara’s government will not withstand the failure to get concessions from the EZ. On the other hand Greece’s exit from the EZ is now a done deal.