from smh

Somalia's transitional federal government has raised concerns with the Australian Stock Exchange over a deal whereby a small Perth explorer claims it has secured the exclusive mineral and oil rights over a large slice of the war-torn Horn of Africa country.

In a letter to the ASX, Somalia's Prime Minister, Ali Mohammed Gedi, offers to co-operate in any investigation into the company's claims.

The letter says the deal with the regional government in the eastern Somali state of Puntland is invalid because only the country's transitional federal government has the power to negotiate the sale of mineral and oil rights.

The letter was sent on October 6, a day after Range Resources announced that it had entered into a conditional heads of agreement with Consort Private Ltd to buy 50.1 per cent of the sole and exclusive rights to all mineral and oil exploration and development in Puntland.

"We understand that this event, if not stopped on time, will have an impact on Range Resources Ltd and the market of the Australian Stock Exchange and we ask you as a matter of urgency to inform your market of this event," the letter says.

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AdvertisementShares in Range Resources, which plans to fund the deal through a $3.45 million rights issue, were heavily traded after the announcement and more than 94 million shares changed hands. The stock price jumped 28 per cent in the two days following the announcement to close at 4.4c last Tuesday. The shares closed on Friday at 3.8c.

Consort Private, which is believed to be registered in the Maldives and operates through a London law firm, signed a contract with the Puntland government on August 30 at the Hilton Hotel in Dubai.

The deal between Puntland and Consort has been the focus of intense public debate in Somalia, where it increased tensions between the regional and federal governments. Civil war between rival clans raged in Somalia for more than a decade, with a federal government being elected only last year.

On August 28, Mr Gedi warned foreign investors to stop trying to make deals for mining rights with regional governments such as Puntland.

"Any violation against this statement will result in negative consequences," it said.

Range Resources also claims to have an interest in the Corachapi uranium property in Puno, Peru.