Tag Archive for miners

Trouble in Asian Markets

For anyone who takes an interest in global economics, our eyes have been largely looking at Western economies for tales of woe, stagnation and debt for some time.  But there are signs that this situation may be starting to reverse.

From our last post highlighting the recovery in the UK and some of the European countries we know turn our eyes to Asia where this week the major share indices all took a tumble.


The problem seems to have come from the economic data being released from the two big players in the Asian market – China and Japan.   Both reports seem to be pointing towards a slowdown in the area.  The Hang Seng fell by nearly 2% and the Nikkei index closed down around 1%.

So what was in these reports to cause such a steep fall?  Well although it was not much of a surprise given the situation Japan finds itself in, the record deficit reported was still larger than expected.  What was probably more damaging though was that it’s 2013 growth estimates were revised down to combine with this bad news.

The startling figure in the Chinese figures was the fall in it’s export levels – a huge drop of 18%.  There were very few analysts expecting a fall of this magnitude and the markets took the news very badly indeed.   The Asian sell off was swift and heavy and even took down the linked Australian share index down 1% too.  There’s an interesting piece on the Newsnight programme currently available on the BBC website – I use this to watch BBC Iplayer in Ireland and

Most of the big miners took a hit, companies like BHP and Rio Tinto supply the raw materials that fuel the growth in the Asian market particularly China.  The hits were inevitable simply because the values of the metals fell in line with the news, copper fell to it’s lowest level since early last year.  Iron ore futures and steel also both dipped sharply in response to the publication of the data.

China is beginning to feel pressure on all fronts economically, and even reported that very rare event a trade deficit of about $22 billion dollars in February, only twelve months ago the corresponding figure was another surplus, an enormous switch in fortunes.  This is a sharp warning that the economic advantages that China has built it’s growth on are beginning to wane, you can only manipulate your currency value for so long and the competitive advantage of lower labour costs don’t last forever as an economy adapts.

Further Information on IP address Modification here.


The Plight of the African Miners

It’s a familiar story but for platinum miner, James Ntseane it is having a huge impact on his life.  A few years ago he borrowed about $900 to pay for a family funeral from african Bank Investments.  Shortly after he borrowed some more money for a house extension and then a new sofa.  A few years later and his loan has spiralled to almost 31000 rand, his repayment difficulties now mean that 13% of his salary is now automatically deducted to service the loan.  He has know idea how much interest he is paying simply that he struggles to exists on what is left of his salary.

There are now millions of South Africans in serious levels of debt.  But this is not the low interest, secured debt that many people take for granted.  There is a flourishing market in South Africa with firms providing easy terms on unsecured loans.  Unfortunately these are often on very high interest levels of about 80% being very common.

The South african miners have of course been in the news over the last few months.  The strikes last year claimed 46 lives during the violence surrounding the miners protests over pay.  There is no doubt that this spiralling debt has been the reason for many of the unrest with miners simply finding themselves swamped with these unsecured loans.

It is of course a concern for any economy when there is a large value of consumer loans which are not backed up with corresponding assets.  The high levels are a real worry for South Africa’s National Treasury, unsecured debt is now roughly 40% higher than a year ago – a huge increase in a short time.

Many South African miners feel trapped by these debts and low wages.  James Carroni told me that there would definitely be more trouble unless the miners received some help. He said the situation in many ways mirrored some of the problems the UK had in the early 1980s with the closure of so many mines.  I used a proxy server to help me watch UK TV online which I found here – http://www.uktv-online.com/ and saw the videos of the UK mining dispute.  The situation could be much worse here especially with the hard handed tactics used by the South African Police.  The African miners are becoming more and more desperate that is for certain.

If you’re interested here’s information on YouTube about where to buy a proxy as specified above.