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Gold/Mining/Energy : SRU-ASE : STARFIELD RESOURCES
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To: CIMA who wrote ()5/1/2000 9:30:00 AM
From: winston.s.c  Read Replies (1) of 1239
 
Dear Ladies and Gentlemen,
I am very surprised that no one on this discussion board has asked one simple question: why are Amplats and Implats exploring in Canada when both these companies have vast PGE reserves and mineral rights in their home country, South Africa?

Is North American news coverage of African affairs so poor that no one has noticed the near anarchy in South Africa's northerly neighbour Zimbabwe? Nor of the apparent total apathetic attitude of the South African government towards the situation there although it is the region's power house in both the military and economic sense? Nor of the contingency plans being drawn up by the European governments to evacuate the
70 000 European population which, if it should occur, will result in mass hunger in Zimbabwe within one year and the consequences thereof on its neighbours?

Are North Americans investors so ill informed that they are not aware of South African governments threats to reclaim mineral rights from companies not exploiting them?

Or the fact that all of the Amplats and Implats mines are located in very poor areas not far from Zimbabwe's border?

Or the fact that Zimbabwe has large PGE reserves which no one is exploiting? The last company to try, BHP, walked away after writing off nearly $800 million. The share price of the last remaining PGE developer, Australia's Zimplats, has dropped over 30% during the last three weeks and has yet to produce one ounce. Considering the political instability it is most unlikely that the company can raise even one cent in capital to continue.

And as for Russia. Well, its supplies seem to be more of a promise than a threat.

Perhaps the answer to all these questions is that Amplats and Implats want to expand in a politically stable country where PGE production maybe smaller than in South Africa but at least reliable. And the world's industries will pay higher PGE prices rather than have none at all.

I got this from the PFN thread.
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