Shares in Avocet mining may be about to fall as investors begin to realise the potential for disaster surrounding the recent cyanide spill from a truck bound for Inata gold mine.
Although its a suprise to me that anyone with an internet connection would have bought shares in the first place, as when you look up who the directors used to work for, it doesnt exactly fill one with confidence. (Can’t be bothered to do the research? Keep reading.)
Fortunately for Avocet though, the cyanide poisoning seems to have, on this occasion, claimed only a few fish as victims.
However, some worried investors do seem to have woken up to the perils of investing in a company which relies on supplies of poison that are trucked through inherently risky terrain, in a manner which would be unlikely to stand up to scrutiny in a ‘developed’ country.
Meanwhile of course, firm commitments are not forthcoming from Avocet mining, or their cyanide suppliers Samsung, who seem to be hoping that all the bad news will just go away.
To be fair it hasnt been the best news year for Avocet, having already had to deal with a large scale labour dispute, Avocet can hardly have relished the negative media attention they have received following the spill of Cyanide at Djibo barrage, which occured about a month ago, and was first reported here, and which has subsequently spread far and wide across the internet.
But it wouldnt be fair to single out Avocet for particularly special attention though, mining companies in general have a pretty bad reputation.
Rio Tinto for example have over a number of years been associated with bad news stories, the most recent of which was when they became embroiled in a bribery and espionage scandal - as Avocet must surely know, one of their two executive directors, Avocet’s Andrew Norris, used to work for Rio after all.
As we all know, safety is a big issue in mining. When a New Zealander fell to his death at Kanowna Belle gold mine in Australia in 1999 (not long after the mine was bought by a company called Delta Gold) industry experts went on record to decry the ‘widespread complacency in the mining industry‘. In fact this ought really to be clear to Avocet too, Avocet’s Mike Donoghue was formerly General Manager – Operations of Delta Gold.
But we must remember that things are done differently in Africa, take for example the Katanga mining operation in that most troubled of African countries, Congo (DRC).
When the Katanga contract was agreed with the Congolese government, analysts pointed out that it “allows a tax regime that appears to offer very little benefit to the Congolese government.” Why was this an issue d’you suppose, perhaps because one of the key individuals involved in Katanga mining was an alleged war profiteer called George Forrest. The same George Forrest for whom the UN prescribed financial sanctions as a result of his participation in the illegal exploitation of Congo’s resources.Weirdly that same George Forrest was a key funder of Joseph Kabila’s political party, People’s Party for Reconstruction and Democracy (PPRD) during the 2006 elections (go figure!).
Yep, they do things differently in Africa, something which Avocet may also realise, seeing as Avocet’s other Executive director, Brett Richards was Senior Vice President at Katanga Mining immediately prior to joining Avocet.
At least there have not been any verifiable complaints of exploitation of local people yet; unlike for example the much maligned ‘Anglo American’ group, who were roundly criticised by War on Want for “profiting from a pattern of global abuse and brutality against poor people, including the murder of opponents” – for more details about all that, you could just ask either one of Avocet’s Russell Edey or Robert Pilkington both of whom used to work for Anglo American, as did Avocet’s vice president, the afore mentioned Andrew Norris.
Anyway, with such a wealth of experience of scandal hit mining companies between them, these clever guys should be able to navigate a path out of these difficulties… at least until another truck full of poison falls into a reservoir.