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Friday, August 08, 2008
What could go wrong in the Islamic Republic of Mauritania?
The last time I attended the Prospectors and Developers Association of Canada’s (PDAC) annual mining conference in Toronto, I stopped by the booth for Mauritania's Ministry of Petroleum & Mines. Representatives were promoting Mauritania as a new mining frontier. That’s the Islamic Republic of Mauritania in Africa, to be exact.
The PDAC conference was held in the first week of March, and, on March 11, 2007, Mauritania was expected to have a democratic election, their first since 1960. There was genuine optimism about the country among resource investors, who are always the first to venture into politically uncharted waters.
As an investor, I was sceptical, and for good reason as it turns out.
While the 2007 election was a success, as much as any election can be called a success, on Wednesday this week there was a military coup in Mauritania. The President has been imprisoned along with other high ranking political figures.
David Emerson, Minister of Foreign Affairs, joined the international community in condemning the coup with this statement:
“Canada demands a return to the constitutional order embodied in the elected president, Sidi Ould Cheikh Abdallahi, and calls for the immediate release of all political figures held by the armed forces, including the President and the Prime Minister.”
By the way, if you own stock in First Quantum Minerals, Lundin Mining, or Red Back Mining, you’ve got exposure to this mess. But if you are on the losing end of a trade here, at least you can say that, in your own small way, you tried to bring industry, opportunity and economic liberalism to another desperately poor, but resource rich, African country.
That's better than any "Fair Trade" scheme.
Posted by Matthew Johnston on August 8, 2008 in International Affairs | Permalink
Comments
There is a minute piece of good news here. They did throw some politicians in jail.
Posted by: Sarcasm | 2008-08-08 1:41:35 PM
Shit. I own a sizeable chunk of Lundin. But these barbaric morons are incapable of democracy which inherently depends on an educated electorate. Bring back the dictatorship asap!
Epsi
Posted by: epsilon | 2008-08-08 5:24:23 PM
Lundin has a huge and diversified portfolio of properties, Epsi. This won't hurt them.
And if you're hoping for a dictatorship, you might get your wish. For your sake, I hope they're friendly toward Western miners. They almost never are.
Posted by: Matthew Johnston | 2008-08-08 5:36:40 PM
They are friendly to the highest payoff Matt. A cost of doing business you know! This IS after all, ALL ABOUT MONEY!!!
These scumbag dictators are really no different than the scumbag leader who was elected.
They are all corrupt as hell.
Epsi
Posted by: epsilon | 2008-08-08 5:44:12 PM
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