I know you have been beating this drum for some time but I thought I may of well respond again. I dealt with these matters some time ago and may as well put up my posts here again - given how the changes in the DRC have been drafted they are likely to have minimal impact on AVZ: see Post #:
31674631
But what intrigues me is that you don't actually explain why the changes were actually made, so I thought I should. You see St Glencore and a lot of its friends in the DRC were basically screwing over the DRC and its people and the government ended saying we have had enough and where actually is our share of profits. Refer: Post #:
31869751 As I said in thie embedded post herein in italics below:
"""""""If you want a theory why DRC is doing what it is doing is because the DRC is not getting a fair share of tax revenues from its exiting mineral developments. Infact it feels ripped off to be frank. See: https://www.reuters.com/article/us-...-7-billion-in-tax-fines-idUSBREA0T12L20140130
Furthermore if anyone believes the rubbish coming out of St Glencore's mouth remember this is an entity that pays stuff all worldwide tax -
see https://www.smh.com.au/business/glencore-tax-bill-on-15b-income-zip-zilch-zero-20140626-3awg0.html
Furthermore, if anyone wants to see why St Glencore is getting targetted in the DRC especially, have a read of this:
https://www.theguardian.com/business/2017/nov/05/the-inside-story-of-glencore-hidden-dealings-in-drc
""""""""""""""
But what you really are alluding to is the concept of sovereign risk and the potential for DRC to again rewrite the rules. Sovereign risk is dealt with in the discount rate to evaluate projects in the DRC compared to say Australia. I personally feel a more appropriate discount rate is closer to 13% for DRC investments in project assessments than the 10% often used. I went through this a while ago too, and my NPV/IRR posts of the other day showed IRR outcomes at 13% discount rates and the AVZ project is viable, obviously if a viable transport solution is found. Refer: Post #:
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But sovereign risk works both ways because anyone been around in WA for a while would know the WA government during the Barnett government increased, for example, the fines rate for iron ore royalties from 5.625% to 7.5%, whilst at the Federal level the likely incoming ALP government will do a few changes that will also impact companies, especially in the CGT area which will impact the cost of capital for companies as in effect reducing the CGT discount means equity agreements need bigger share price discounts for companies seeking finance through share placements etc.
But back to WA the latest brain fart from the WA EPA, albeit they now have backed down, would have impacted lithium developments, and especially their wish to start producing lithium chemicals instead of solely exporting 6% grade spodumene.
https://www.abc.net.au/news/2019-03...guidelines-for-wa-resources-projects/10901574
Why do I link the above - depending on how the likely incoming ALP government deals with climate change in Australia can impact resource developments here and certainly can change the goal posts. Lets hope that they do realise that developing gas resources and the local lithium industry actually means that it is a net benefit to world CO2 emmissions through end use and what they are replacing, instead of just focusing on the CO2 impact in Australia alone of a resource proposal. There is no benefit in limiting an industries growth in Australia if China, for example, says oh well we will burn more coal because can't get gas in power stations and/or because we don't have enough spodumene purchases well we'll just continue driving petrol driven cars etc etc. Note: this paragraph has no relevance for AVZ obviously because they will operate in the DRC.
As I said sovereign risk is dealt with in discount rates and works both ways. Providing this post for balance.
VB drunk, time for bed.
All IMO
