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Showing posts from July 28, 2014

South Africa: Global Platinum and Gold Prices Intensify Mining Struggles

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Low global platinum prices have diminished profits in the platinum sector, and this year major mining companies in South Africa faced further profit losses during the five-month strike by the Association of Mineworkers and Construction Union. The perceived inability to reform labor and energy costs in South Africa will lead to a greater mechanization of platinum and similar mining sectors in the coming years.

Labor costs are only one part of the problem. Many of South Africa's platinum, gold and diamond mines have operated for years, leading to lower ore quality and deeper and narrower mines. Narrower mines limit the amount and type of equipment miners can use. Deeper mines mean that mining companies have to enact more health, safety and environmental measures and laboriously move people and machinery into place. This requires more time, more labor and more expenses. Moreover, South Africa's platinum sector suffers from the rivalry between the Association of M…

Kiev's Su-25s Prove Useful in Combat Against Militants

A Ukrainian air force SU-25 fighter plane flies during exercises near the southern city of Mykolayiv in 2006.(GENIA SAVILOV/AFP/Getty Images)

Summary


Despite a number of recent incidents in which pro-Russian militants have shot down Ukrainian military airplanes and helicopters, aircraft continue to play an effective role in the conflict in eastern Ukraine. Their deployment contributed to Kiev's recent capture of the cities of Dzerzhinsk, Soledar and Rubizhne by providing valuable support to advancing ground forces. Aside from Mi-24 and Mi-8 helicopters, Su-25 aircraft have played the most prominent role in air support and, as a result, have suffered disproportionate casualties. As a simple, reliable and sturdy ground attack airplane, the Su-25 will continue to be useful in eastern Ukraine, although it will come under increasing threat from militant air defense systems.

Analysis


The Soviet Union introduced the Su-25 in 1975 as its version of the U.S.-produced A-10 Thunderbolt, known as…

Israel Could Prepare for a New Phase in Gaza

An Israeli army officer walks in a tunnel said to be used by Palestinian militants for cross-border attacks July 25.(JACK GUEZ/AFP/Getty Images)

Summary


Israeli troops have spent nine days in the Gaza Strip, and resistance from Palestinian militants has reportedly been dropping. The Israeli military is reporting that it has been able to secure the areas it has moved into. Thus, the ground invasion seems to have accomplished its initial limited goal of damaging the tunnels leading from the Gaza Strip into Israel.

Meanwhile, Israeli Defense Minister Moshe Yaalon has told troops that Israel might significantly widen the Gaza ground operation. The expansion of any limited Israel Defense Forces operation likely will not address a fundamental point in Gaza: There is no long-term military solution apart from occupation, which would come with a high political cost and would create new targets for Palestinian militants.

Analysis


The Israeli military's ground operation thus far has been limited …

Mining Firms in South Africa Move Toward Mechanization

Striking platinum miners gather at the Wonderkop Stadium in Marikana, South Africa, waiting for news on a proposed deal to end a strike on June 12.(MUJAHID SAFODIEN/AFP/Getty Images)

Summary


With the memory of a protracted labor strike in South Africa's platinum sector still fresh, mining companies are looking to cut their losses and lessen future constraints. Anglo American Platinum, the world's largest single producer of the precious metal, is looking for buyers for its more labor-intensive mining operations, shifting its focus toward operations with greater mechanization that are less affected by South Africa's labor issues.

Other platinum and gold mining companies are likely to follow suit. Low global platinum prices affected the platinum sector, and this year's profits for major mining companies in South Africa were swept away during the five-month strike by the Association of Mineworkers and Construction Union. The perceived inability to reform labor and energy cost…

European Union: Weak Economies Remain Vulnerable to Banking Crises

Customers line up in front of a branch of Bulgaria's First Investment Bank in Sofia on June 27.(NIKOLAY DOYCHINOV/AFP/Getty Images)

Summary


Over the past two years, the European Union has created an environment in which member states facing economic problems can borrow at relatively low interest rates. Because of the European Central Bank's promise of intervention in debt markets, a sovereign debt crisis similar to what Greece experienced in 2010 seems unlikely. High unemployment and weak economic activity, however, continue to undermine the banking sectors of several EU countries, where a growing number of households and companies are struggling to pay back their bank loans.

While it is impossible to predict exactly when and where Europe's next banking crisis will take place, trouble is more likely in states such as Italy or Greece. Outside the eurozone, banks in Hungary, Romania and Bulgaria will also struggle to reduce their portfolio of nonperforming loans. Since a bankin…