WITH labour accounting for about 60% of costs and platinum still way below its record high, Royal Bafokeng Platinum joins a long list of miners of the white metal that will have to look at drastically cutting back on jobs. It’s the really ugly part of the business cycle and we need no reminding, given what transpired in North West last week. It’s not good news for a country that’s already sitting with official unemployment close to 25%.

Margins remain under pressure because of the industry’s struggles in trying to cut back production without cutting jobs. In the run-up to the African National Congress leadership contest, we aren’t going to see any firm intervention by the government. Whatever hard decision are made could come back to haunt you, come December.

So we’ll just have to watch the sun continue to set on the industry and fractured labour relations deteriorate even further.

How much longer can the industry survive with only four days’ profitability in 22 working days? And that’s for the few profitable shafts out there.

For some miners, that figure is in the very low single digits.

Party politics are playing much too big a role in mining. And it’s not the decisions being made that are affecting the industry; it’s the indecision that’s making life difficult for all stakeholders.

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WITH the global picture uncertain at best, despite the noise of stock markets reaching new records, is it not the ideal time for investors to look at those stocks or sectors that are more defensive in nature?

The all share’s 10%-plus climb this year has got me thinking a lot about these defensive stocks, especially as economic data and corporate earnings aren’t supportive of these high valuations. Evergreens are the companies that will, no matter the circumstances — another global credit crunch, double-dip recession or even a global depression — still be attractive.

You really don’t want to own an ice-cream company in an ice age.

Globally, a company that passes that bill would be Microsoft. While its growth rates aren’t nearly as stellar as its rival, Apple, no other company has successfully managed to muscle in on its core strength, the desktop. A case could be made for Coca-Cola, but there’s the strong possibility that sugar may be the tobacco of tomorrow. (I am waiting for the first court case.)

In a South African context, how many companies can you name that share similar characteristics?

Given that we have a resource bias on the JSE, Anglo American and some of the larger resource players are supposed to be the mainstays. But they are all on less sturdy ground because of the ever-changing mining regime they operate in locally.

BHP Billiton, with its much smaller exposure to South Africa, could pass as the next best, if not the best, option for some. That’s why the Australian miner, along with Rio Tinto, has done much better than Anglo and the country’s other large miners in this period of slowing economic growth.

South Africa’s fund managers have been dumping local miners in favour of the more geographically spread international mining houses.

Finding South African evergreens in the mining space is getting a whole lot harder.

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INVESTORS aren’t going to get the one-size-fits-all solution to the European sovereign debt crisis and it’s actually quite ludicrous to expect a breakthrough of that nature if you’ve got to get the buy-in of 17 members of the common monetary union, let alone the 27 that form the European Union.

Yesterday, it was the turn of the German Bundesbank to stir up some commotion in markets over the three-year-old crisis. The bank criticised a European Central Bank plan to lower sovereign yields through bond purchases.

It highlights the differences among capitals on how to end to this cycle of bad news around the old continent. As policy makers return from their summer holidays, we’ll see more of this fallout played out across the region.

There are a number of significant dates pencilled in on this battle to get a handle on the crisis and, more importantly, boost confidence. The leaders of France, Germany and Greece meet this week. Next month, the European Commission and the International Monetary Fund assess Greek progress with budget cuts. Then there’s the matter of the German constitutional court decision on the European Stability Mechanism. It’s going to be a roller coaster of emotions.