RE: good articleMark Turner's 8/23 article on mining in Ecuador entitled: Ecuador Miners Subject to Political Risk - With Risk Comes Reward is very interesting and coming one day after the damning and fear spreading article by Alfonso Soto is a relief to some extent. However, reading reading between the lines there are several interesting points:
1. If Alberto Acosta is Rafael Correa's right hand person and he is an environmentalist, how could anyone take comfort in the mining laws drafted under his supervision will be as Turner allured to - "mining friendly"?
Let's be realistic, the premises of mining and protecting the environment are not exactly compatible - whether they are open pit or underground are considered just a moot point by many environmentalists. (however ARU's FDN is an underground mine, hence should not be affected if we take what is reported at face value).
2. If Correa’s bid to take majority control of the national assembly (voting to be held on 9/30) that will re-write Ecuador’s constitution, if he does not get his way he has threaten to quit. Turner's indication is this is going to be a tough battle, so Acosta (he right hand person) decided to help their own cause by bashing the foreign mining companies to give their chance a boost.
Let's say they failed and Correa quits. Now what? Ecuador is again in political turmoil. No new mining laws, investors will sit on the sideline for a long time until the dust settles from this political fallout. Many ARU shareholders praying for a quick buyout will be very disappointed. After all Ecuador has seven governments in the past 10 years, what makes this Correa government so special? He may be poplar now but for how long, if he can solve any of the country's problems? Will we see an eighth government in the past 11 years because of this? Will that government be more mining friendly?
Let's say Correa wins. With Acosta (the "green candidate") given the mandate to write his own mining laws, would he now dust off what he ranted off as just "political rhetorics", and the new laws will be sensible and investor friendly as we all hope to hear from people like Mark Turner?
3. The Alfonso Soto article on 8/22 is well planted. There is no doubt about it. This may be real news and have to be released, but the timing is perfect to knock down ARU's share price. This is after we already experienced a lot of share price manipulations on 8/21, right after the drill results were released. Turner is just about the only journalist who is not curious on the timing of the Soto article.
Love to hear everyone's comment on these points.