Platinum and the “Group Hug”

South African platinum developer Wesizwe is looking for help from its neighbours.

The company has been speaking with next-door miners Royal Bafokeng. At Wesizwe’s annual general meeting yesterday, management told investors that the two miners could work together to share costs for processing plants, power, water and even staff housing.

The cooperation “group hug” is a sign of the times. Miners are doing anything they can to cut down on spiralling capital and operating costs.

It also shows the benefits of working in a mining district. Like the Bushveld where Wesizwe and Royal Bafokeng operate.

Large mining camps attract big pools of skilled workers, technical knowledge and development capital. Making all the companies involved a lot more effective in building infrastructure, sourcing equipment and expertise, and addressing social and environmental issues.

The reason that northern Chile produces 30% of the world’s copper is partly geology. But there are a lot of other places on that Earth have copper. What Chile also benefits from is having an established, dense cluster of advanced operations. And that’s a function of the economy, the geography, even the local culture. (This is the reason why entrepreneur-driven America has the best oil services sector–and the most advanced shale gas development.)

Something to consider when looking at where to build a project. Having the right neighbours can make a big difference.

Here’s to helping others,

Dave Forest

dforest@piercepoints.com / @piercepoints / Facebook

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