Two companies that are having an interesting start to Christmas are Oracle Coalfields and Avocet Mining. Although the Christmas element is probably not terribly relevant to Oracle, which is a Pakistan coal development company that, while in the middle of its EPC, this week had its mining lease for a key block cancelled by the Coal Mines Department of the Sindh Government. Oracle has been developing a coal based energy business in power hungry Pakistan for many years now and seems to have doggedly got it to the development stage with Chinese partners SEPCO. Oracle are appealing and in the words of Oracle CEO Shahrukh Khan:

"Whilst this is an unexpected and arbitrary decision, on the basis of our substantive and detailed appeal I expect a constructive dialogue with the authorities leading to withdrawal of the notification of the cancellation of the mining lease.”

Is this the classic case of all the government support to invest in a country suddenly turning sour once a project has been proved valuable and money can be wrung from it? We shall see and also monitor whether the Sindh government has actually broken their own mining legislation. As one investment manager cynically commentated: “If its being threatened with confiscation Oracle is probably more valuable than we thought it was and might be worth a second look.”

The second company who probably thought Christmas had been cancelled only to have it restored again is Avocet Mining who encountered, hosted, experienced or endured a strike and mine ‘sit in’ at their Bukina Faso, Inata gold mine. The strike only lasted a few days with people now ‘dispersed to their homes’. The worker action seems to have been triggered due to a cost cutting exercise being undertaken at the Inata mine as a consequence of a falling gold price.

Discussions are being undertaken with worker and government representatives by the Company. With falling commodity prices investment in Africa’s resources is likely to be highly limited and/or protected. We hark back to Mark Bristow’s (Randgold) talk earlier in the year about industry and governments needing to find a truly sustainable solution to building resources industries in Africa. Inclusion, social development and an economic regime that is robust must be the foundation stones. Only by continued economic support into a region can basic infrastructure and services be developed for the good of a population.