The China Nuclear Engineering and Construction Corporation (CNEC), today pulled out of Niger and shut down its uranium prospecting operations after receiving threats from the Tuareg rebels.

Apparently, All the Chinese have left the site and arrived at Ingall (100 km south of Agadez) with their prospecting equipment and a major military escort.

This pullout comes shortly after a Chinese national was kidnapped on Friday by the rebel movement. The movement, called the Movement of Niger People for Justice has called for an immediate end to all mining in the North of Niger and claims that “No foreigner will be safe” until their demands are met.

We do not know who is “right” and who is “wrong” in these conflicts and it is not our policy to take sides. However we do not see how shutting down mining operations will help Niger as a country. No mining means no companies making money, which means no taxes being paid, which means no money for the people of Niger. Also, these violent actions by the rebels discourage investment in the country and so its economy will struggle to prosper. We do not invest in areas like Niger exclusively for this reason, political uncertainty makes investors nervous and so many refuse to put their hard earned cash into such places.

No matter how great the project may be, we simply do not think it is worth risking our money in unstable regions of the world. In fact, if the story is spectacular, then that is even less reason to put your money into it as it will just be more tempting for government to nationalise or rebels to targets.

Stick to politically “safe” countries and you take a great deal of risk out of your investment.