RE: Behind the headlines - A textbook caseI found your post pointing out grams per ton very good information twobtapn. The figures you pointed out are very below the web site. I suspect part of it is recovery, and I see someone pointed out they were using a lower grade ore from somewhere else because of the labour and other problems.
I did a post on the cost effect of declining grade on cost on my blog, https://makingsenseofmyworld.blog.infomine.com/2007/08/25/declining-grade-of-gold-%e2%80%93-are-the-cost-disadvantages-linear/. It is just an analysis type of thing that ties in perfectly with the example of declining grade you've pointed out.
I was wanting a better understanding of this concept for my assessment of gold stocks as I do not liking the grade that many gold producers are using to set reserves/resources.
Right about now I think Eastern has gotten ahead of itself. It has had problem keeping to the increase in production schedule they laid out. When I first looked at it last fall I expected costs to have gone down each quarter, not up. Something I was reading somewhere made me think costs would be around $400/ton, but they've gone from $700 to $900/ton. It does look like some of the problems they've had can be worked out.
I was talking to a fellow teacher who had been from South Africa about the effects of AIDS and how it is spreading through the economy, the very high turn over of workers because they get sick and die. Regions can't get children to school because of the loss of the middle generation. The ones that still have grandparents are often having to work to help support the family unit, but then there are just so many without parents. Crime is going up like crazy. He talks about getting an email from his aunt about getting raped, but she's saying it is no big deal because she wasn't beaten and is alive -- the amount of rape happening is such that women expect it to happen. The degree of problems there is such that being raped is a smaller problem in the scope of things. So, in this kind of environment, with people getting sick and dying, not educated and high crime, there is going to be labor problems.
My niece is working in mining in the congo and than goodness she has an armed guard. She says that trying to train workers there is much harder than she expected. Things we take for granted that make common sense, well, they really aren't common sense if you've had poor education. A lot of our "common sense" was taught to us in school so she's finding training takes much longer than you'd expect.