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Revealed: The platinum strike 'profit phoenix'

by , 18 July 2014

There's no denying, five months of strikes in the platinum industry has created a mess out of our economy. Even the South African Reserve Bank admitted the effects of the strike was part of why they only increased our interest rate with 0.25% instead of the typical 0.5%.

But out of all the bad that's happened for the platinum sector, one good thing's emerged...

Like a phoenix rises out of the ashes this opportunity could see one company in particular rise up and become very, very profitable!

The one good thing the platinum strike has caused is good news for investors

Mining companies have realised they can’t keep going like they have in the past. They’ve realised they need to look for new solutions. That technology could become the ley to mining in South Africa.

If you ask me this is crucial for the South African mining industry. We’ve become uncompetitive globally as other countries have mechanised while we’re still using hard labour.

But the strikes have shown miners now that depending too much on labour is a major risk to their businesses.

And, if locally mining companies start mechanising it means less dependence on labour. But more importantly it means these mines would operate 24/7 at the highest productivity levels possible.

And that means decreased costs and increased profits for investors.

But while mining companies are only starting to mechanise what’s the opportunity for you?

The one company to profit from strike woes

Two months ago I told my Resource and Scarcity Report readers about Master Drilling Investments – I believed the company would be perfectly positioned to take advantage of mechanisation efforts after the platinum strikes end.

And this story is starting to play out in front of my eyes…

In the words of Danie Pretorius, Master Drilling’s CEO, “One of the good things to come out of the platinum strike is that mining companies realise they cannot do things as they did in the past. They are looking for new technologies. We need to produce more tonnes with fewer people and greater efficiencies.”

And that’s exactly what Master Drilling is helping mining companies do…

In fact, Master Drilling is exploring a horizontal drilling technique at Petra Diamond’s Cullinan mine. This is a way to drill horizontal tunnels, quickly and safely with less labour.

The company is also testing a technique called microboring at Sibanye Gold.

And in Chile Master Drilling is already deploying remotely controlled drills to work underground. This mine first employed them because workers couldn’t go underground directly after blasting because of noxious gas. Now these drills keep the mine running 24 hours a day compared to only 10 hours in the past…

In short Master Drilling is pulling down costs by reducing the number of people operating drills. It’s also increasing staffing efficiencies by ensuring one highly paid person has several skills, such as electrical and mechanical, as well as being a machine operator.

The fact is, the company is already mechanising the industry. And I believe, as the CEO does, that more mechanisation is to come…

Bad news for unions – but the future is here

I’m sorry to say that a lot of unskilled workers are going to end up without jobs.

But the unions are the ones that brought this onto their own members.

Now, mines are moving toward mechanisation.

And companies like Master Drilling will invent new, innovative solutions where none currently exist.

The fact is – the technology of the future is here, and it’s here to stay.

As we speak Master Drilling is securing more than R300 million in funding from international banks to fund its manufacturing programme of all sorts of drills…

Mark my words; we are at a turning point. And I believe this company is at the centre of change.

Here’s to unleashing real value

Francois Joubert

Editor, Resource and Scarcity Report

Revealed: The platinum strike 'profit phoenix'
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