So what about that Anglo American downgrade by UBS on Friday? Surely it is nothing new? The report suggests that there is "rising political risk" and points out that there has been "random application of mining laws". I guess that they are referring to the Sishen Iron Ore and Arcelor Mittal rights with the Imperial Crown Trading entity that appeared literally from nowhere. It is laughable and scary at the same time. In fact we are welcome holders of BHP Billiton in light of much of the recent events, I would agree that there is heightened political risk. Ironically this comes after the radical thoughts of the ANC Youth League were basically told, we will look at nationalisation, and that is about it.
What do you think? Do you agree that in light of recent events from the DME that the political risk temperature has risen. And as such, local mining assets should attract a discounted valuation relative to their international peers? Perhaps the question being asked itself is the answer that we are looking for. We are giving this serious consideration here in our many daily discussions. Sometimes I reckon we should stick in a webcam here, so that folks could check out what we do here. Send me back a mail with a simple, yes, the risks are up, or no, they are the same.