For non-followers of the famous, mythical, detective the dog incident is one of his classic investigations because it involves spotting a clue in a dog that did not bark in the night despite it being close to the action, the theft of a horse.

It is the same with private equity funds. They claim to be sitting on a collective $US10 ($A11) billion in funds earmarked to buy mining assets, but so far have done nothing with that money, and when opportunities pop up they miss out.

The X2 fund run by former Xstrata boss Mick Davis announced earlier this year that it was looking at certain BHP Billiton thermal coal assets, which was hardly surprising because coal was the launch pad for Davis and Xstrata.

However, rather than make an offer X2 faded from the scene, just as Magris Resources, another private equity fund, failed to push ahead with a planned bid for Glencore’s Las Bambas copper project in Peru.

The funds, and their $10 billion, have been so conspicuously absent from the mining investment scene that it has caused The Hog to arrive at two conclusions.

Firstly, that the funds do not believe asset values have fallen low enough to make them attractive investments – which is a bit of a worry, and secondly that either the funds start investing soon or they will be wound up because investors will demand their money back.

Doing nothing, which is the current status of the funds and their reputed $10 billion, is not a business plan, even if it does precisely fit the exchange between Holmes and Inspector Gregory from Scotland Yard, which goes like this:

Gregory: “Is there any point to which you wish to draw my attention?”

Holmes: “Yes, to the curious incident of the dog in the night-time.”

Gregory: “The dog did nothing in the night-time.”

Holmes: “That was the curious incident.”

What that exchange in a superb short-story by Arthur Conan Doyle called Silver Blaze did was demonstrate that sometimes it is events that do not happen that contain as much information as events everyone can see.

In the case of Silver Blaze the dog not barking was the clue that the horse was stolen by someone known to the dog. In other words, it was an inside job.

If you apply that sort of thinking to the lack of deal-making by private equity funds in the mining industry you see the same situation with everyone looking for evidence of movement whereas the importance lies in nothing happening because it is a signal that some of the smartest people in the investment world believe we have not reached the bottom in the asset-value cycle.

For coal, particularly Australian coal, it is hard to imagine that conditions could get much worse with prices for both thermal and metallurgical coal at multi-year lows, pits closing across the country, job losses mounting and the threat of more to come.

Earlier this week the boss of Rio Tinto’s coal division, Harry Kenyon-Slaney, warned that another 1300 jobs were at stake if the New South Wales government did not get a wriggle on and approve the expansion of the Mount Thorley Warkworth mine in the Hunter Valley.

“The clock is ticking”, was his ominous observation complete with an implied threat that unless there was government approval before the end of the year the mine would close.

Removing Mt Thorley Warkworth from the world’s coal supply chain would not on its own tip the scales one way, or the other.

However, it would be, according to some calculations, the 48th coal mine around the world to close or to have production severely curtailed and that would add to the downward pressure on supply with a theoretical upward boost to coal prices.

If this sounds a bit far-fetched then go back to the original proposition in this week’s ramblings from The Hog – where are the private equity funds and their $10 billion.

Sherlock Holmes would know the answer to that question – they are on the sidelines waiting for the surplus in coal, iron ore, and a number of other minerals, to shrink to a point where the mining world is in sight of a price recovery.

In other words, fund managers do not believe the mineral price cycle has hit the bottom because if they did they would be buying.

The flipside of that observation is that the day we see a fund make a move on a mining asset we will know that the recovery has started.