Sovereign Risk

What must be realised by all concerned is that the concept of sovereign risk means that in the future Panguna mine will NOT be given the go-ahead. This mine will not be developed in our lifetimes if theft of prior legal entitlements proceeds …… none of the other big companies or banks will touch it because of the risk of loss of shareholders’ money.

I would like to draw your attention to developments happening right now and over the last few weeks. I think that “the boil is about to be lanced” in that 4 of our Govt Ministers are on the scene. Julie Bishop is promoting (and it has been some time in the making) that PNG create a sovereign wealth fund, and lately PM O’Neill is talking about taking ownership, OK Tedi today, but also recent comments regarding Panguna.

If the PNG wealth fund was to purchase Rio’s shares in BCL then in normal circumstances they would offer the same price to all other shareholders prior to compulsory acquisition at the end of the process.
A takeout by PNG Govt in their sovereign wealth fund solves the big issue of Sovereign Risk, and then they can get on with solving their local problems at their leisure … and the rest of us can take our money elsewhere, hopefully without loss.

I have noted the negativity of “dubspec” in particular on this forum over the last few months who is vigorously down-ramping at every opportunity although he states he does not hold any shares … and perhaps there is some basis for negative views of late … but I have to say that I am suspicious of dubspec’s motives … I think he just wants your shares on the cheap …. It is still probable in my opinion that BCL will be OK and at a much higher price.
What we have at present is the result of blatant computer trading and down-ramping .... my opinion.