Africa + Mining = Tough Going
Thursday, May 17, 2007 at 4:09PM
Uranium Stocks in Other
Africa Map 16 May 07

It is with some trepidation that we consider investing in Africa and here are few anecdotal stories for thinking the way we do.

On a rare rendezvous with some old buddies in London we propped up a bar and regaled each other with our various experiences thus clearly trying to demonstrate which one of us was the toughest guy in town.

The first story comes from a project in Nigeria. In an attempt to do things in the right and proper manner and also to build a solid relationship with the chief of a local village various meetings were convened. The project would benefit from access across the Chiefs land and in return the Chief would benefit from a number of items that the village so badly needed. The deal was struck and everyone went away happy. The access was allowed and the items were duly delivered. There, a happy ending. Well not exactly.

While travelling to the work site one fine morning the car that the team were travelling in was ambushed by a group of angry and extremely irritated young men. These men poured gasoline over the car and struck matches in a menacing manner and demanded money. These men were apparently the sons of the Chief and were aggrieved that they did not benefit personally from the newly agreed deal. After a few dollars were handed over the anger subsided but the team was warned that another deal with them would be necessary if they wanted to be left alone in future. Not the best start to a day at the office.

The second story comes from the French Congo near a town called Brazzaville. This was a place were edginess was the norm however the tension was being fuelled by disorganisation and poor communications resulting in the army not being paid. To be surrounded by soldiers with low slung AK47s is disconcerting enough without the added kicker that you are staying in what looks like a four star hotel and they haven’t eaten for a few days. So after a couple of event filled months it is time to go on leave. The taxi to the airport is full of jovial people, the driver is happy as he has got a paid job for the day. The team members are happy as they are heading out of there. Soon the engine appears to be rattling a little more than usual and eventually comes to a halt, unfortunately on a bridge. Instinctively the team leap out of the vehicle and all frantically start pushing towards the vehicle with every once of strength they can find. Their intuition proves to be well founded as the first bullet whistles over their heads. To be exposed on a bridge during such fragile times is not recommended. A dozen shots or so ricochet off the structure but they make it unharmed across the bridge and to the cover of the bush.

Trembling hands lift the bonnet and the engine reveals the loss of a fan belt.
You then get to say those words that you never had the courage to use until now and so you turn to the company secretary and say:

“Young lady, your tights please and now!”
Tights make a reasonable fan belt according to the company manual chapter sixteen page ninety-four! You arrive at the airport and everyone needs a drink.

This is not Calgary. Hunger and oppression, real or perceived are dangerous combinations when forced on those who have little.

The temptation to tax, nationalise or confiscate are enormous. These problems must be handled with the utmost diplomacy and sensitivity if a project is to be successful. As investors we must take note of where we are investing as geopolitical environments can change rapidly. Take a good look at the relevant experience of the management team in these areas as knowledge of local customs, the people and their expectations are invaluable.
Article originally appeared on Uranium Stocks (
See website for complete article licensing information.