Craig McGuckin said....., page-15

Really desire? You would think that the whole island nation is still at war. In general the attitude within sri lanka is that developing countries are always under the microscope for potential problems wheras the more developed seem to ignore their own shortcomings. For a nation coming out of a war , that area most affected will still have a military presence. It has been barely 5 yrs since its horrific conclusion. Sovereign risk is an issue in many countries worldwide - Australia has it's own issues when a one looks at the political games played out regarding foreign investment. Sovereign risk is a broad term.
Let me explain to my fellow holders why today (unlike last year) , MRF is the least affected foreign entity in srilanka.

The industry MRF is involved in is not immoral. Sri Lanka is heavily influenced by religious sensitivity (esp. Buddhism) and will reject publicly what is seen as immoral (Packer found that out recently with his casino initiative).

It is a foreign company, not implicated by scandals. The main parties are for foreign investment.

It is from Australia, which has good relationships with the main parties.

As long as it treats religious and historical sites properly when mining, it will not be an issue.

The main issues MRF do face are:
ST delays due to election and potential civil disturbance (might delay permits and production by a few days at max i.e. end of aug for licence if we do not lock it in before the 17th is a possibility as a worse case scenario).

Any unseasonal rains.

Other issues are the extremist buddhists (who are heavily opposed by the traditional buddhists) who are extremely nationalistic and quite racist i.e. the country only belongs to sinhalese buddhists. Their influencecwhich was growing has decreased as they were seen as a major reason the country rejected the last president.

Any possibly nationalisation plan by governments, which was a real threat last year due to the autocratic leadership. This has now diminished ascthe new pres has reduced power of his role and increased influence of pm.

So from a sovereign risk perspective, at the moment it is akin to a person leaving his house in australia and being eaten by a drop bear.