| | Minesite Weekly Roundup 24th September - 1st October 2012 | | | Dear Minesite subscriber,
Famously, you can call the top of the market by when your cabby starts giving you investment advice. But what conclusions can one draw when legendary toymaker Lego gets in on the act? This week it came to Minesite's attention that Lego has brought out a range of mining-related assembly kits, which it is heavily promoting on children's TV.
Lego is one of the great survivors of the toy industry. Its marketing tie-ins and product themes involve some of the biggest names and brands in the world, including Star Wars, Indiana Jones, Pirates of the Caribbean, Harry Potter and Spongebob Squarepants. In 2011, the Lego Group turned over US$3.4 billion, which isn't bad for a company that started out in a carpentry workshop in Denmark back in 1932.
But is its endorsement of the mining industry as a saleable and promotable product theme has interesting implications. The range includes an individual mining truck, and a fully equipped mine, which comes with haul trucks, crane, portal, tunnel-boring machines, conveyor belts, jackhammers, detonators, dynamite, gold nuggets, and boulders (presumably ore).
So, does the packaging up of mining and mining-related kit as children's toys mark a long-overdue acceptance of the mining industry by a hitherto sceptical consumer culture? Perhaps.
That consumer culture has hitherto shown a curious schizophrenia towards mining, merrily consuming the commodities the industry produces while condemning the means of its production. Raising children with mining toys may mark a small step towards a more realistic assessment of where the materials that make up our world actually come from.
On the other hand, the Lego "mine" is notably short on leach pads or tailings facilities, so it may be a while yet before reality really bites.
More to the point though, Lego has a good track record of hitching its star to winners. The implication is that mining, and in particular gold mining, is likely to prove a durable product range in the years ahead. Thus far the assessment seems to have been right. The Lego mine is ranked at position 129 on Amazon's sales chart for toys.
Whether it goes up or down in that chart over the next couple of years would be an interesting question for a spread-better to consider.
But it's worth noting that the children of ten years ago are now graduating from college and are increasingly choosing mining as a profession. Is it because of cultural changes and lego toys? Maybe partly. But it's also because, as reported by Bloomberg recently, graduates from the South Dakota School of Mines are now earning more than graduates from Harvard.
There may have been a few wobbles of late, but mining is still in remarkably good shape.
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